Landlords face annual property tax under Burnham

Landlords could become liable for an annual property tax under proposals that would replace council tax and stamp duty with a charge paid by owners.

The Prime Minister Andy Burnham is facing pressure from Labour figures and left-leaning think tanks to consider the overhaul, although he has said major reform is not imminent.

The model previously backed by Mr Burnham would impose a yearly charge of 0.48% of a property’s value, The Standard reports.

Now one think tank is proposing a higher rate of 0.96% which would apply to second homes, empty properties and homes owned by non-residents.

The published plans do not say that every privately let property would automatically attract this rate.

Calls for reform

Michael Jacobs, an emeritus professor of political economy at Sheffield University, rejected claims that Mr Burnham would have to abandon policy ideas because of pressure on the public finances.

He told BBC radio: “That view is incredibly dangerous and is wrong.

“Abolition of council tax and stamp duty and their replacement by a proportional property tax.”

Oxford professor Ben Ansell said: “Our tax system has increasingly shifted responsibility towards younger workers.”

Bills move to owners

Under the ‘Fairer Share’ model, liability for the new tax would move from tenants to property owners.

A home valued at £250,000 would attract a £1,200 annual bill at 0.48%, while the charge on a £500,000 property would be £2,400.

At the higher 0.96% rate, the respective bills would rise to £2,400 and £4,800.

Estimates suggest that London’s homeowners would contribute an additional £7.5bn each year, with hundreds of thousands of residents facing increases capped initially at £1,200 annually.

Stamp duty remains

Mr Burnham has supported the principle of proportional property taxation but has made clear that an immediate overhaul is not planned.

Fairer Share would abolish stamp duty on owner-occupied homes, while retaining it for second home and non-resident buyers.

The campaign says more than 100,000 people have signed its petition calling for council tax and stamp duty to be replaced.

Its proposal also includes transitional protection and payment deferrals for homeowners who own valuable properties but lack the income to meet their bills.