With Andy Burnham poised to become Prime Minister later this month, speculation surrounds the potential economic policies of his future administration. While the former Greater Manchester mayor has committed to Labour’s manifesto promises regarding income tax, VAT, and national insurance, he has hinted at adjustments elsewhere, such as modifying business rates to support local pubs and shops.
A significant area of interest is Burnham’s historical support for replacing stamp duty with a land value tax (LVT). Stamp duty, which currently applies to property transactions in England and Northern Ireland, has long been criticized by economists, including those at the Institute for Fiscal Studies, who view it as a barrier to property market liquidity. Experts argue that taxing land instead of transactions could encourage better use of existing housing stock.
However, industry analysts like Lucian Cook from Savills emphasize the formidable practical and political hurdles. Implementing an LVT would be complex due to the challenges of isolating land value from improvements, and any shift in the tax burden could spark public backlash, especially if residents feel forced to sell their homes. Furthermore, while Burnham has criticized the current council tax system as regressive, any attempt to transition to a proportional property tax—potentially modeled after proposals by the group Fairer Share—would likely face intense scrutiny regarding regional economic disparities between areas like London and the rest of the UK.
