Could Andy Burnham’s proposed land tax force landlords to sell?

Reply to the comment left by Debra at 28/06/2026 – 20:50
0.96% is for landlords as well,

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while landlords, overseas owners and second-home owners could face a higher rate of 0.96%.
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Many properties in London are worh about a £1m. This means the landlords will need to pay land tax of about £10k or more. This is ridiculous, as it will not be possible to pass this to the tenants.
The only way is to sell the properties. Thsi is an unfair tax on landlords. Jyust to pay mortgage interest, maintenance, compliance certifications and tax is more than sufficient costs. Not much left for the owners/landlords.
This will be a risk too far to far to contain.

Reply to the comment left by Tiger at 20:57
One of the problems we have is that prices have become too high for average folk to afford. There is a correction in certain sectors and areas at the moment and prices are already falling in London. True, many properties in London are worth more than £1 million. Many of these will have been purchased years ago perhaps for a quarter of their value now. That is a tax free gain.
Pity the people who have bought a property worth over a million recently with a 75% mortgage. They will struggle with at 0.48% or 0.96% levy every year. This in turn will lead to a drop in values which will lead to lower tax. It appears that Burnham is making it up as he goes along. Labour hog tied themselves with their pledges on VAT, NI and income tax (although landlords will have to pay an extra 2% income tax). They are how thrashing around trying to find other things to tax. This will distort the economy.
It would be better for Burnham to bite the bullet and put 2p on income tax. Then most people will contribute and the effect on the economy won’t be so damaging.

Reply to the comment left by Ian Narbeth at 16/07/2026 – 14:12
You are absolutely right that taxing assets would distort the economy and the negative effects would extend far beyond the housing market causing the economy to stagnate further, not grow. On properties in London though whether these properties of £1M purchased years ago for a quarter of their value result in a tax-free gain depends in part upon whether they have EVER been rented (because if so there’ll probably be a CGT bill) and if they’ve always been a PPR (principle private residence); also from a family perspective upon whether anybody is about to get stung for inheritance tax. That’s especially the case now that Rachel Reeves has included pensions in the inheritance tax net. Inheritance tax is very unpopular because it results in people being taxed twice on the same asset….at 40%.

For those people who have a PPR in London that has never been rented out and who also have a pension, my suspicion is that their families would be way better off if they didn’t pay Andy’s asset tax, but instead they sold their principle private residence for cash, moved to somewhere like Portugal, and drew both their state pension and their personal pension in Portugal. I believe were they to do this they would lose the benefit of the ‘triple-lock’ but they might be able to avoid capital gains tax at their marginal rate and their heirs probably wouldn’t face inheritance tax at all or might face it at 10%, not 40%.

I’m guessing that if you have a SIPP or SSAS then you can have your pension paid in Portugal or possibly transfer it to somewhere else like Cyprus en route to Portugal, and your SIPP and SSAS assets might then be lifted out of the inheritance tax net.

If you had property invested in a limited company in GB but you were resident in Portugal, I suspect that your company would be liable to Corporation tax in GB, but your dividend income would be taxed at your marginal rate in Portugal, and any inheritance tax on the shares might disappear as well, perhaps without you having to issue freezer shares or do anything complicated.

If you did head for your golf-course in the sun, as a pensioner you’d lose the benefit of the triple lock and losing the benefit of the triple-lock would help reduce the GB benefits bill. But at a time that the governor of the Bank of England has pointed out that the priority is to grow the economy, when most of the nation’s wealth is tied up in pensions and housing stock, and when (because they paid mortgages and into pensions for years) most of the wealth in the country is tied up in the hands of the relatively elderly, only an idiot would suggest that it would be a good situation to be in for pensioners to be better off taking their pensions outside GB. But I suspect that’s the situation many people are already in now after Rachel Reeves’ changes.

If Andy taxes assets he will only make the situation far, far worse, he’ll get in a mess. These days it’s not just rock stars and film stars who can go abroad to escape punitive levels of taxation.