Last reviewed: 30 June 2026
TL;DR: Andy Burnham, the frontrunner to become Labour leader and prime minister following Keir Starmer's resignation on 22 June 2026, has backed a campaign proposal to replace council tax and stamp duty with a Proportional Property Tax (PPT) of 0.48 percent of a property's current value, capped at £1,200 a year in increases for existing owners. This is a campaign proposal, not government policy.
Keir Starmer resigned as prime minister on 22 June 2026, triggering a Labour leadership contest in which Andy Burnham, the Mayor of Greater Manchester, has emerged as the frontrunner. Burnham has not published a formal manifesto, but he has repeatedly backed reform of council tax and stamp duty, and is understood to support a proposal from the campaign group Fairer Share for a Proportional Property Tax.
What is the Proportional Property Tax proposal?
The PPT, as set out by Fairer Share, would replace both council tax and stamp duty with a single annual charge based on a property's current market value, rather than the 1991 valuations that council tax bands in England still use. The proposed rate is 0.48 percent of a property's value each year, rising to 0.96 percent for second homes, empty properties and homes owned by non-resident overseas buyers.
For existing homeowners, any increase in their annual property tax bill compared with current council tax would be capped at £1,200 a year. That cap would not apply once a property changes hands, after which the new owner would pay the full PPT rate.
Why is council tax being targeted for reform?
Council tax in England is calculated using property valuations from 1991. Burnham has described the system as highly regressive, arguing that lower-value homes in many parts of the country carry a heavier relative burden than higher-value properties, particularly outside London, where valuations have moved furthest from the 1991 baseline relative to current market prices.
Stamp duty has separately been criticised by housing groups for discouraging people from moving, including older homeowners looking to downsize and families needing to relocate for work or space.
Who would pay more, and who would pay less?
Analysis published by Fairer Share suggests a majority of households nationally would pay less under a PPT than under the current council tax system, with the campaign group citing a figure of around 75 to 77 percent of households seeing a reduction. The picture in London differs: separate analysis cited in property industry reporting estimates London homeowners could collectively face around £7.5 billion more in annual property tax under the proposed system, concentrated in higher-value boroughs.
Charles Goodhart, a former Bank of England economist, has warned that introducing a land or property tax of this kind too quickly could risk a sharp fall in house prices, given how much of the financial system is collateralised against property values.
Is this confirmed government policy?
No. As of 30 June 2026, no government department has published formal proposals to replace council tax or stamp duty. Burnham has not yet won the Labour leadership contest, and his public comments so far have focused on broad direction rather than a costed policy. A change of this scale would typically require primary legislation and a transition period.
What this means for homeowners now
For anyone with a mortgage, remortgaging, or planning a house move in the next 6 to 18 months, the more immediate factors remain the Bank of England base rate and individual lender criteria, rather than a tax reform that has not been legislated. Council tax bills and stamp duty rates due this year are unaffected by the proposal at this stage.
KEY FACTS
- Proposed rate: 0.48% of current property value annually, 0.96% for second homes and overseas-owned property
- Would replace both council tax and stamp duty
- Increase capped at £1,200 a year for existing owners; cap lifts when a property is sold
- Backed by Andy Burnham, frontrunner for Labour leader following Keir Starmer's resignation on 22 June 2026
- Not government policy as of 30 June 2026
This is a campaign proposal currently associated with one leadership candidate, not enacted legislation. Council tax and stamp duty continue to apply as normal under current rules.
RELATED GUIDES
This article is for general information only and does not constitute financial, legal or tax advice. Proposals discussed here are not enacted government policy. Kael Tripton Ltd is not authorised or regulated by the Financial Conduct Authority. Readers should consult GOV.UK or a qualified adviser before making decisions based on potential tax changes.
Frequently asked questions
Is the Proportional Property Tax a confirmed policy?
No. It is a proposal backed by Andy Burnham and campaign group Fairer Share. No government has adopted it as formal policy as of 30 June 2026.
Would the Proportional Property Tax replace council tax entirely?
Under the proposal as described, it would replace both council tax and stamp duty with a single annual charge based on a property's current value.
How much would the proposed tax cost?
The proposed rate is 0.48 percent of a property's current value per year, rising to 0.96 percent for second homes, empty homes and overseas-owned property, with increases capped at £1,200 a year for existing owners.
When would any changes take effect?
No timeline has been set. The proposal depends on the outcome of the Labour leadership contest and would require new legislation if pursued.
Sources
GOV.UK, council tax bands and valuations guidance
Bank of England, public commentary on property and financial stability
Fairer Share campaign, Proportional Property Tax proposal (named as the originating source of the proposal, not as an authoritative data source)
