Andy Burnham Proposes Land Value Tax to Replace Council Tax

Incoming Labour leader Andy Burnham has proposed replacing the existing council tax system with a land value tax, which would charge homeowners 1.28 per cent of the value of the land they occupy. Burnham described the plan as aspirational socialism and a productive form of taxation intended to discourage land hoarding, arguing that the current system's reliance on 1991 valuations is no longer justifiable.

Data from Tax Policy Associates indicates the shift could cause significant bill increases. Some Band D homes in Bristol could see annual charges rise from £2,584 to £4,791, while 21,000 London homes might face bills over £50,000. In response, James Cleverly and the Reform UK party criticized the plan, with Cleverly arguing that families and first-time buyers would be punished for decades of rising house prices.

Parallel to the land tax proposal, Burnham is considering lowering the threshold for a planned April 2028 mansion tax from £2 million to £1.5 million. This follows a report from an all-party parliamentary group (APPG) on local government calling for modernized tax bands. The APPG also urged the removal of central government requirements for referendums on tax increases. While MP Clive Betts supported this for the sake of local accountability, the TaxPayers' Alliance warned the move would be a cash grab allowing councils to avoid accountability.