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July 2026
The Burnham effect
There has been a big increase in visitors to this site - probably because of Andy Burnham and the possibility of him becoming Prime Minister - and possibly because he represents a “fresh start” for the Labour government - new ideas are on the table - at last!
Andy is a good bloke - and he has a decent taste in music!
In the past Andy has openly supported Land Value Tax - for the obvious reasons that is is simple, fair and impossible to avoid. We really hope he hasn’t changed his mind under pressure from the media and from those with wealth. (Political donations make this doubly complex and should be banned totally - but that is a separate discussion.)
However …
There is a problem when LVT is not fully understood and when it is seen as part of a “parcel of wealth taxes”. This adds unnecessary confusion and complexity - the sort of things that keep lawyers happy.
The golden rule is simple: every exception creates a loophole - and rich lawyers!
Unfortunately Andy may still be trapped in the neoliberal way of thinking that has led to the mess we are in now. Created at the time of Thatcher and Reagan, and supported by Tony Blair and “New Labour”, neoliberalism has led to global financial crashes, to austerity and to falling living standards for the overwhelming majority of our population. It will lead to the next financial crash.
Andy Burnham was part of New Labour which still believes that the economy has to be run in the same way as a household - “you can’t go to Tescos to buy your weekly shop until you’ve got your wages.” They believe that “tax pays for things” despite the evidence that this is not the way the economy operates in the real world.
We hope Andy’s experience in Manchester has shown him how wrong this is and how a sovereign government can turn an economy round with an accent on care rather than on corporate profit and without worrying about “the bond market”.
Small aside. the government (Rachel Reeves who had minor roles in the Bank of England and HBOS), talks about finding ways for major institutions (pension funds etc.) to “invest in UK business”. She almost certainly confuses the stock market with investment because, having never worked in a company that makes things, she sees it from a banker’s perspective -. A company sees not one penny when shares change hands. They are a secondary market, the seller gets what the buyer pays (minus money taken by brokers) and do not help the economy one bit - though they do line the pockets of City financiers. “Investment” is money that goes directly to companies for R&D, for manufacturing, for marketing - for building a business.
The latest rumour is that Andy is considering a 2% tax on wealth over £10 million. This will be a disaster and already has lawyers laughing all the way to the bank. Wealth taxes sound good but they don’t work. They are very easy to avoid. They bring in a fraction of what was hoped for. Every country that has tried them has abandoned them or scaled them back dramatically.
He may also be considering a “Proportional Property Tax” (PPT) which we cover elsewhere.
Latest questions
You talk about someone deferring payment until a property is sold or transferred but what if their property is heavily mortgaged and when they sell they don't have enough to pay the accumulated LVT after the mortgage has been redeemed? And what order of priority will a deferred LVT have compared to deferred care home fees?
LVT could replace all property taxes, including Council Tax which people are already paying. The vast majority of us will pay less than we pay in Council Tax. A small minority will pay more and, if they cannot pay the difference, they can defer that part of the payment until the home is sold or transferred. The amounts concerned will not be huge.
Mortgage lenders take into account not only your income but also your outgoings Currently these include everything: paying for utilities, paying for child care, paying for food, and paying Council Tax. If they don’t think you can cover it, they won’t lend the money. Exactly the same will happen with LVT - they will take it into account before determining the level of mortgage they can offer.
LVT is a debt in the same way that Council Tax is a debt - it has to be paid one way or the other. When selling a house the priorities are simple: repaying the mortgage, paying fees, and paying anything due to HMRC.
Obviously LVT will not be introduced overnight. It will be phased in over several years (5 or 10) as other taxes are phased out - this gives all of us, and the property market, ample time to adjust.
Council Tax is recognised as unfair - a mansion in Westminster pays less than a 3 bed semi in Gateshead. A common national rate will be part of rebalancing the North/South divide and there is no doubt that those in the South East will pay more under LVT than those in the North East.
As of July, 2026, the average price of a house in the UK is just under £300,000. In London it will be more, in the North East it will be less.
During the phasing in it may be necessary to introduce two levels of LVT: a lower one for primary residencies (your home) and one for everything else. This will protect those in the South East from a rapid rise and allow the whole market to adjust. Obviously such a lower rate would not apply above a specific limit - a £50,000,000 house in Belgravia is not an average home! The limit for the lower level of LVT could be set at three or four times the national average.
This threshold can be determined during the period of preparation for LVT.
Couples who own a property - will the liability for LVT be joint or several? In the case of relationship breakdown in particular it would not seem fair if one individual could be pursued for the whole of the LVT debt?
A mortgage has to be repaid by those named in the mortgage. LVT has to be paid by the freeholders named in the Land Registry entry.
If relationships fall apart the result will be exactly the same as with a mortgage - the parties remain mutually responsible for paying. The arrangements they make between themselves are of no concern to a mortgage lender or to HMRC. It has to be paid.
Applying LVT to land owned abroad does not seem to fit with the rational you give behind the LVT, ie that UK land belongs to us as UK citizens and therefore we should all benefit from it. Why then should UK citizens benefit from land in Spain or America or wherever else? Adding this in just seems to me to undermine the conceptual basis for LVT which you are trying to put forward and makes it seem like you are just trying to raise as much tax as possible. Also, how will you know what foreign property is owned by UK citizens or companies? It will not be easy to enforce and is open to many of the criticisms you level at the existing system (relying on self reporting, rich owners establishing foreign based companies to put their foreign based land into to avoid paying, admin burdens of avoiding double taxation).
The first part is correct. As a society we “own” all the land in the country and LVT can be seen as the rent we, as a society, charge for the privilege of holding it (“freehold”).
There are no rights without responsibilities. With the rights of being a citizen go the responsibilities of being one - and one of those responsibilities is paying tax. Those who retire to sunny Spain find they are paying UK tax on their UK pensions! Those who wish to avoid tax invest in tax havens and in land outside the UK.
The largest land holder in Scotland pays LVT on that land - to Denmark because he is a Danish citizen and Denmark uses LVT.
No one will suffer double taxation. The arrangements to prevent double taxation have been in place since the League of Nations in 1928. The mechanism is simple. You (a UK legal entity: citizen, company, trust, whatever) declare the value of all land you hold outside the UK (the penalty for not doing so is the same as for any other way of lying to HMRC - fine or imprisonment), you list (with proof) the property taxes you are paying locally and any balance is due to HMRC as LVT.
Double taxation prevention means you never pay twice.
If it is decided to adopt LVT, how will we avoid the property market grinding to a halt in the run up to the system being introduced? No-one will want to move house under the old system and pay stamp duty, and then immediately or within a few years be paying a replacement LVT. It could cause a lot of short to medium term distortions.
The property market did not grind to a halt when MIRAS was phased out in 2000. It did not grind to a halt in 2025 when the state of Baden-Württemberg (11.5 million people: bigger than Belgium, three times the size of Wales!) in Germany introduced LVT in 2025. It did not grind to halt when the latest incarnation of Stamp Duty was introduced in 2003.
LVT is not a new tax, it is a replacement tax. It could replace Council Tax, Stamp Duty and anything else - that is a political decision.
There are always cut-off dates when new legislation comes into force - though the proposal is to phase in LVT while phasing out other taxes so the property market has plenty of time (years) to adjust. See the answer to the first question above.
The property market always goes up and down - that’s what markets do. People will still want to buy and sell homes, landholders will still want to buy and sell land. The writer’s grandfather bought three farms in Herefordshire and Gloucestershire during the slump in agricultural land prices in the 1930s. That’s the way of the world.