Andy Burnham is expected to become Prime Minister later this month (Image: Getty)
Andy Burnham could introduce an alternative to stamp duty following his endorsements of property tax reform. The former Manchester Mayor, who is expected to become Prime Minister later this month, has kept tight-lipped over his policy plans once Labour leader.
But he has criticised stamp duty in the past – a tax paid when buying property or land over a certain threshold, which sits at £125,000 or £300,000 for first time buyers in England and Northern Ireland. Mr Burnham has suggested a Land Value Tax (LVT), an annual payment based on how much a site is worth, would be a “more productive form of taxation”.
He previously described LVT as a way to “make sure land is used for good, productive purposes, and if people are sitting on it and hoarding it, they get taxed and that money can come back and be redistributed”.
Abolishing stamp duty, especially for first time buyers, could be a popular move (Image: Getty)
While past endorsement is no guarantee that Mr Burnham will enact the changes once in government, scrapping stamp duty could be a popular move.
Stuart Adam from the Institute for Fiscal Studies (IFS) told the BBC: “More or less any property tax or local tax is going to be better than stamp duty.
“What stamp duty does is discourage people from buying and selling … [Scrapping it] would lead to less pressure on the housing market – less need to build more stuff.”
Lucian Cook, head of residential research at Savills, warned that Mr Burnham would be making significant changes without an electoral mandate, however.
“It is such a big change with clear winners and losers,” he said. “It will be difficult to pull off within the rest of this Parliament.
“For any new tax system you bring in, you would want it to be revenue neutral. There is little doubt that [stamp duty] suppresses transaction activity, but it’s about balancing that against the alternative.”
Property website Rightmove is among the industry voices calling for stamp duty to be abolished, at least for first time buyers on new-build and resale properties.
Alex Slater, director of new homes at Rightmove, said: “First time buyers underpin the whole housing market, but affordability and getting that first foot on the ladder is becoming more difficult.
“We need a set of reforms that go further, faster and work together, from stamp duty changes to more investment in affordable housing, to give this group a better chance of getting onto the ladder and keeping the market moving.”
The Express has contacted Andy Burnham for comment.