UK Homeowners Could Stop Paying Council Tax and Stamp Duty Under Burnham Plans

London homeowners could face higher annual property taxes under proposals backed by Greater Manchester Mayor Andy Burnham, as pressure grows for a major overhaul of the UK’s property tax system.

The proposals are not Government policy, and ministers have not announced plans to abolish council tax or stamp duty. However, calls for reform have intensified after a petition attracted more than 100,000 signatures and reports suggested more than more than 100 Labour MPs support reviewing the current system.

At the centre of the debate is the long-running criticism that council tax no longer reflects modern property values, with campaigners arguing the system disproportionately affects homeowners in lower-value areas.

According to The Telegraph, council tax in Hartlepool amounts to around 13.5 times more than in Westminster relative to local property values, highlighting what supporters describe as a significant regional imbalance.

Burnham has argued that homeowners in parts of northern England can pay a higher proportion of their property’s value in council tax than owners of significantly more expensive homes in London.

Campaigners Call for a New Property Tax System

Campaign group Fairer Share is urging the Government to replace council tax and stamp duty with a Proportional Property Tax, which would charge homeowners 0.48% of a property’s current market value each year.

Under the proposal, the owner of a £300,000 property would pay about £1,440 annually.

Fairer Share argues that 77% of households would pay less overall, saying the current council tax system is based on property valuations from 1991 in England, despite significant changes in house prices over the past three decades.

The petition exceeding 100,000 signatures means it may now be considered for debate in Parliament, although this does not require the Government to adopt or implement the proposal.

Why London Homeowners Could Pay More

A proportional property tax would link annual tax bills directly to current property values, rather than historic valuation bands.

That approach would likely increase annual bills for owners of higher-value homes in London and the South East, while reducing bills for many homeowners in lower-value regions, particularly across northern England.

Supporters argue the proposal would better reflect today’s housing market and create a fairer distribution of local taxation.

Critics, however, warn it could significantly increase annual costs for households that own valuable properties but have relatively modest incomes, particularly older homeowners who have benefited from decades of house price growth.

The proposals have therefore reignited debate over the longstanding North-South divide in property taxation.

Burnham Says Reform Should Be Considered

Burnham raised the issue during an interview with the BBC’s Laura Kuenssberg, arguing that homeowners in Greater Manchester can pay substantially more council tax relative to the value of their homes than owners of much more expensive properties elsewhere.

He said ministers should consider reforms that ‘create some fairness’ within the current system.

Several possible approaches have been discussed publicly.

Alongside the Proportional Property Tax, campaigners and policy experts have also suggested a land value tax, which would tax the value of land rather than buildings, as well as changes to existing property tax thresholds.

According to The i Paper, both a proportional property tax and a land value tax have been discussed as possible long-term alternatives, while more than 100 Labour MPs are reportedly calling for reform of council tax.

No formal Government proposal has been published.

Stamp Duty Changes Could Shift the Tax Burden

Supporters of reform also argue that abolishing stamp duty could reduce one of the biggest upfront costs associated with buying a home.

Lower transaction costs, they say, could encourage more people to move, downsize or relocate for work, improving mobility within the housing market.

However, replacing stamp duty with an annual property tax would shift rather than eliminate the tax burden.

Instead of paying a substantial one-off charge when purchasing a property, homeowners could face recurring annual payments throughout the time they own their homes.

Whether households ultimately paid more or less would depend on property values, location and the final design of any replacement system.

Reform Remains Under Discussion

Not everyone believes major changes can be introduced quickly.

Lord Blunkett told The i Paper that introducing a land value tax could prove ‘politically problematic’ because it would inevitably create winners and losers.

Government sources have also sought to downplay suggestions that sweeping reforms are imminent, with reports indicating no final decisions have been taken.

For now, council tax and stamp duty remain unchanged. While campaigners, local leaders and some Labour MPs continue calling for reform, the Government has not committed to replacing either tax, and any significant changes would require legislation and parliamentary approval before taking effect.