Andy Burnham, Prime Minister and Makerfield MP, has been urged to introduce a land value tax (LVT) for households in England. This proposal seeks to reform the existing council tax system as part of efforts to finance the government’s social care programme and increased defence spending.
The suggested land value tax would be levied at 1.28% of the land value, effectively replacing both the current council tax and residential stamp duty. Experts analysing the plan indicate that approximately two-thirds of households would pay less overall, while about one-third might see increases in their bills.
Burnham has acknowledged the need to adhere to the Labour Party manifesto on which the government was elected in 2024. However, he has also recognised that many feel the current council tax system is inequitable.
READ MORE: Andy Burnham urged to consider land value tax amid council tax reform debate
In a conversation with Laura Kuenssberg on the BBC’s Panorama programme, Burnham highlighted disparities in council tax rates, stating: “There are people here in Greater Manchester who pay a much higher council tax than people living in much larger homes in London.” He praised Labour’s former chancellor, Rachel Reeves, for initiating reforms aimed at addressing fairness by reevaluating property banding to better reflect home values.
Burnham commented: “That’s an example of something that I think was right and fair.” Nonetheless, he emphasised the importance of respecting the election manifesto, noting that any proposed tax changes would need to align with those commitments. “So there are big decisions ahead, you are right about that,” he added.
Previously, Burnham has indicated he is open to reforming the council tax system, describing himself as “persuaded” by the arguments in favour of change.
Supporting the land value tax proposal, Dan Neidle of Tax Policy Associates said: “The principled case for LVT is easy. The practical case for LVT seems equally straightforward if we look at the headline result that (on our model) at least 63% of people will benefit in immediate cash terms.”