Calculate EXACTLY how much Andy Burnham’s land tax raid will cost you

HOMEOWNERS across Britain could be hit with eye-watering new tax bills under plans being drawn up by Andy Burnham. The Government is understood to be looking at scrapping council tax and stamp duty altogether and replacing them with a brand new property tax system. Two rival models are on the table. Sign up for the Money newsletter Thank you! One is a proportional property tax based on a home’s current market value. The other is a land value tax, based purely on the value of the ground a property sits on. Officials at the Treasury were already exploring options before Burnham took over at No 10, according to the The i Paper. Former housing secretary Steve Reed confirmed in his final Commons select committee appearance that reforms to both council tax and stamp duty were being actively considered. Under the land value tax model analysed by Tax Policy Associates, homeowners could face an annual charge equal to 1.28% of the value of the land beneath their property. Unlike some previous property tax proposals, owners would not be able to defer payment until the property was sold or they died. Most read in Money Get tax advice from an expert (AD) Are you looking for advice on how to pay less tax legally? If you click on this link we will earn affiliate revenue Award-winning independent financial advice firm Kellands Chartered Financial Planners are offering Sun Money readers a free one-hour consultation with their experts worth £250. · Find out more Kellands (Hale) Limited is authorised and regulated by the Financial Conduct Authority. FCA Firm Reference No. 193498 Burnham has also been linked to a separate proportional property tax proposed by the campaign group Fairer Share. This would charge homeowners 0.48% of their property’s total market value each year. Under this alternative, any increase would be capped at £1,200 above a household’s existing council tax bill. However, second-home owners and those living abroad would pay double the standard rate, at 0.96%. You can use our calculator above to estimate how much you could pay under either proposal. The impact of either would be particularly brutal in the capital. More than 21,000 London homes could face annual bills of over £50,000 under a land value tax. Kensington and Chelsea alone accounts for more than 15,000 of those properties, while Camden, Hackney and Haringey would also be among the worst-affected boroughs. Nor would the pain be confined to London. Across the UK, a further 576,000 homes could face annual bills exceeding £10,000. The estimates from Tax Policy Associates assume that the land value tax would completely replace council tax, which currently places homes into eight bands based on their 1991 values. Stamp duty, the one-off tax paid when buying a property, would also be abolished under the plan. Comment now