Andy Burnham faces growing calls from Left to hit London with new homes tax bill of up to £7.5bn

Andy Burnham is coming under growing pressure to bring in a landmark overhaul of property tax which could land hundreds of thousands of Londoners with higher bills.Mr Burnham has made clear that he has no plans to imminently embark on such a major shake-up of property tax.But the reform is backed by many Labour MPs and activists.Michael Jacobs, Emeritus Professor of Political Economy at Sheffield University, a former special adviser to Prime Minister Gordon Brown, is pushing for such a change.He is editing a publication for Left-leaning think tank Compass which includes 70 policies which Mr Burnham could adopt as part of his radical blueprint to change Britain.Prof Jacobs dismissed claims that the Prime Minister will have to ditch many of his ideas as he faces the economic reality of Government.“That view is incredibly dangerous and is wrong,” he told BBC radio.Asked to name one of the proposal in the Compass document, he added: “Abolition of council tax and stamp duty and their replacement by a proportional property tax which would benefit a very large number of council taxpayers but mean that people who own larger and more valuable homes pay more.”Many Londoners would pay more homes tax under a proportional property levyGettyThere are various forms of PPT and Prof Jacobs did not give details of the proposal for Compass.The new levy would be based on 0.48% of the value of a property, or 0.96% for second homes, empty properties and those owned by foreign nationals.Read MoreMany Londoners in less costly homes would also pay less under the reforms which would predominantly benefit areas outside of the capital.Overall, the city would face an additional property tax bill of £7.5 billion anually.Property prices are falling in many parts of central LondonPAAnother Left-leaning think tank, the Institute for Public Policy Research, also argued that the UK needs to shift taxes away from young workers towards older people and property.In a paper, written by Oxford professor Ben Ansell, it calls for a new “fiscal contract” and suggests extending national insurance to older earners, replacing council tax and stamp duty with a PPT, and equalising capital gains tax with income tax rates, alongside an investment allowance to protect normal returns.Prof Ansell said: “Our tax system has increasingly shifted responsibility towards younger workers while protecting many of those who have benefited most from decades of rising property and asset wealth.”Questions remain over how some Labour promises, including £5 billion in defence spending which was announced before he entered No 10 and his plans for major reforms to the social care system, will be paid for given the state of the public finances.