Could Andy Burnham scrap stamp duty?

Andy Burnham, the MP for Makerfield and a prominent figure in the Labour party, is exploring significant reforms to property taxation. While committed to Labour's 2024 manifesto pledges on income tax, VAT, and national insurance, Burnham has hinted at potential shifts, including possible increases to business rates on warehouses to fund tax cuts for pubs and high-street businesses. A key area of focus is property and land taxation, with Burnham having previously championed the idea of scrapping stamp duty.

“

The LVT, an annual tax on the market rental value of the land, would allow for the abolition of stamp duty - a tax on the aspirations of young people to put down roots and get on in life.

Burnham's preferred alternative is a land value tax (LVT), an annual levy based solely on the value of the land itself, excluding any buildings or improvements. He has also reportedly backed a proportional property tax, an annual tax based on a percentage of the property's value. While his past advocacy for property tax reform is clear, the practical implementation in government remains uncertain.

“

More or less any property tax or local tax is going to be better than stamp duty.

Economists widely criticize stamp duty, a tax paid by home buyers on properties over a certain threshold, as one of the most economically damaging taxes. The Institute for Fiscal Studies describes it as penalizing transactions and discouraging buying and selling. They argue that an LVT is a more efficient revenue-raising method because land is a fixed, identifiable asset that cannot be moved. Furthermore, an LVT would not impact behavior, unlike stamp duty, and could help alleviate pressure on the housing market by encouraging better use of existing stock.

“

What stamp duty does is discourage people from buying and selling.