“Our campaign isn’t about raising taxes. There’s no room to increase our property taxes. It is a case of rebalancing, making them fairer,” says Andrew Dixon of Fairer Share.
But rebalancing means that while some households would see their annual bills fall, others – namely in London – would see their bills rise.
London takes the brunt
Fairer Share has estimated that while most households would see annual taxes rise or fall by less than £1,000, residents of Westminster and Kensington & Chelsea would see bills rise by £2,600 and £4,200 respectively.
House prices, meanwhile, would fall most in the London borough of Brent, dropping by an average of £13,224, and would rise by £16,387 in Hartlepool.
“I think everyone would agree that that is the ideal system that we want to get to. The big problem with that, and the reasons why it hasn’t yet been introduced, is that people who are in higher-value properties would lose out,” says Browne.
“Anywhere that any property has an increase in its council tax liability would see its value reduced.”
The flip side is that homeowners in these areas would also be the biggest beneficiaries of stamp duty getting scrapped, but they would not get to enjoy this until they moved.
Goodhart adds: “Let’s say you’ve just bought a house. You have paid a massive amount of stamp duty and then someone suddenly turns around and says, ‘We’re going to abolish stamp duty and introduce a land tax instead’. You’ve been hit both ways.”
There are various ways to mitigate these effects. The TBI recommends implementing the reform incrementally. The Centre for London calls for a proportional property tax that is charged at a lower rate in the capital than outside it. Fairer Share has suggested options for deferred payments and caps on the initial tax rises until a home is sold.
These measures would lessen the house price impact, but there would still be shifts.
Calculations by Landman Economics in 2022 estimated that, under Fairer Share’s plans, values in the capital would fall by a little more than 2pc. House prices in the North East, by contrast, would surge by nearly 6pc.
But Burnham is a leader who might have more stomach for this kind of impact than other politicians. After all, his support base is certainly not in London.
“Someone might well want to say, ‘I haven’t become prime minister just to sit around,’” says Leunig. “If you are happy to be known as the King of the North.”
