London homeowners could face a collective annual bill rise of about £7.5 billion if Andy Burnham's preferred property tax overhaul is implemented. The figure comes from modelling by the campaign group Fairer Share, published and reported in late June 2026 by the International Business Times, which assumes council tax and stamp duty are replaced by an annual levy of 0.48% on owner occupied homes and 0.96% on second homes, empty properties and overseas-owned houses. The change would cut upfront transaction costs by abolishing stamp duty but increase recurring bills for many owners because charges would be based on current market values rather than 1991 valuations. Key design questions remain unresolved, including how often homes would be revalued, how tax bands would be set, and what transitional protections would apply.

Many homeowners would see higher recurring bills, because charges would be set on current market values rather than 1991 era valuations used for council tax.

How the levy would work

Under the model laid out by Fairer Share and summarised in the International Business Times, primary residences would attract a single annual charge equal to 0.48% of current market value. Second homes, empty properties and houses owned by buyers overseas would face double that rate, 0.96%. The group estimates that the higher charge on second homes and empty properties would raise roughly £5 billion nationally. That extra revenue, Fairer Share says, helps offset the loss of receipts from abolishing stamp duty and council tax.

The proposal also contains an explicit transitional safeguard. Any increase in a property's bill would be capped at £1,200 a year until the property changes ownership. The cap is presented as a smoothing measure to reduce shock for existing owners while the system moves to up to date valuations.

The switch would shrink the tax on moving home by removing stamp duty, a change proponents argue would make the market more mobile. But it would also convert a once only transaction cost into a recurring liability. Practical examples in the analysis underline the point: a home valued at £300,000 would be liable for about £1,440 a year under the 0.48% charge, and higher value boroughs would see still larger average increases.

Mastheads

The distributional picture is sharply uneven across London boroughs. Fairer Share's borough level modelling, reported in the International Business Times, suggests that only around 12% of households in Westminster would pay less under the new system. By contrast about 23% of households in Wandsworth would see their bills fall. At the other end of the scale roughly 58% of households in Barking and Dagenham would be better off under the levy.

The analysis also estimates that about half of households in Hackney, Southwark, Islington and Croydon would pay less in annual charges.

These variations stem from two linked facts. First, council tax still rests on property values assessed in 1991, so wealthier boroughs are under taxed relative to current market values. Second, the 0.96% surcharge on second homes and empty properties directs a disproportionate share of new receipts towards investor owned stock, which Fairer Share says is the main source of the roughly £5 billion in extra revenue nationally.

Proponents argue updating charges to reflect current market values is fairer. They say the present system produces large cross borough disparities that are difficult to justify. Critics reply that the distributional effects would be politically painful in affluent urban boroughs and that replacing a long standing local taxation architecture will face strong resistance.

Andy Burnham himself has long supported property tax reform. During his Makerfield by election campaign he described council tax as "highly regressive" and he has previously written about replacing stamp duty with forms of land value taxation. Political momentum for discussing his proposals hardened in late June 2026 after Keir Starmer resigned as prime minister on 22 June 2026; media and housing sector commentary then flagged Burnham as a leading contender to succeed him.

That political backdrop matters for markets and households even if ministers don't set borrowing costs directly. Housing trade analysis and guidance for homeowners note that while politicians don't directly set mortgage rates, large scale fiscal changes and the uncertainty they create can influence borrowing costs and housing market behaviour. The modelling doesn't attempt to forecast those second round effects, but it flags them as relevant to any decision on implementation.

There is no formal manifesto commitment or legislative text yet. The public statements and the Fairer Share analysis leave several core design choices unresolved: whether charges would be banded or charged as a continuous percentage, how often revaluations would take place, and what transitional protections would apply for older or lower income homeowners. Those are the questions that will determine whether the headline numbers translate into politically manageable changes for households on particular streets and in particular boroughs.

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Fairer Share says the plan includes a transitional safeguard: any increase would initially be capped at £1,200 a year until the property changes ownership. Originally reported by ibtimes.co.uk.

This article was created with AI assistance.