Burnham's Property Tax Plan: The Risk to Your Portfolio

Andy Burnham became Labour leader on 17 July 2026 with 94% of MP nominations - the highest share in any modern Labour contest - and is expected to enter Downing Street on 20 July. The property tax reform he has backed for years is no longer a campaign position. It is now incoming government policy.

What Burnham Has Backed and What It Means

Burnham has publicly supported the Fairer Share campaign's "proportional property tax" (PPT), a proposal to replace both stamp duty land tax (SDLT - the one-off tax paid on property purchases above certain thresholds) and council tax with an annual levy based on a home's assessed value.

Under the Fairer Share model, as reported by Property Industry Eye, most homeowners would pay an annual charge of 0.48% of their property's value. A home worth £300,000 generates a bill of £1,440 per year. The rate doubles to 0.96% for second homes, overseas-owned properties, and long-term empty homes - so a second home valued at £500,000 would attract a charge of £4,800 annually.

The critical mechanism is annual revaluation. As property values rise, so does the annual charge. This is the point at which house price growth becomes a tax liability. Under the current system, appreciation only creates a cost when an asset changes hands - either as SDLT for the buyer or capital gains tax (CGT - the tax on profit from selling an asset) for the seller. A recurring charge resets that logic entirely. For investors running the comparison now, our stamp duty calculator shows the current transaction cost picture against which any future recurring charge would be measured.

The Capital Gains Tax Question

Alongside the PPT, Burnham's inner circle has signalled movement on CGT rates. Louise Haigh - described by The Times as central to organising Burnham's transition to government - wrote publicly that CGT should be "brought closer" to income tax rates.

The current CGT rates on residential property, as reported by Property Industry Eye, are 18% for basic-rate taxpayers and 24% for higher-rate taxpayers. Full alignment with income tax would leave the basic rate largely unchanged at 20%. But for higher-rate taxpayers, the rate would climb to 40% - a significant increase for any landlord or second-home owner crystallising a large gain on disposal.

Burnham's rival in the leadership contest, Wes Streeting, backed full CGT-to-income-tax alignment as firm policy. Burnham himself has not personally endorsed that position, but he has not ruled out a review. The gap between those positions may narrow quickly once government begins. Investors who want to think through exit timing and strategy in this environment will find useful frameworks in the property investment strategies hub.

What the CGT Data Shows About Investor Behaviour

The data from recent CGT changes gives a clear read on how property investors respond to rate signals. According to Property Industry Eye, CGT receipts fell 8.4% in 2025, dropping to £13.5bn from £14.9bn in 2024. Analysts attribute this directly to investors delaying disposals following the rate rises already applied - the hold-and-wait response.

Then the reversal. HMRC recorded £19.7bn in CGT receipts in January and February 2026 alone, up 73% from £11.4bn in the same period the previous year. That surge reflects investors rushing to crystallise gains ahead of further anticipated rate increases.

The trend is consistent. When CGT rates rise - or are credibly signalled to rise - investors first hold, then move to the exit in volume. A Burnham premiership that announces a firm rate increase would likely trigger a second wave of disposals, adding supply into segments already under pressure. Planning for that scenario is a core part of any forward-looking operational approach, and the business and systems hub covers exactly this kind of structured portfolio review process.

Property Industry Eye also notes that 43.5% of active freehold-owning companies in England and Wales have held their property since before April 2016. This group carries substantial embedded gains and faces the heaviest exposure to any rate change.

Who Faces the Most Exposure

The data points to four groups at greatest risk under a combined PPT and CGT reform scenario.

Landlords face both the higher 0.96% annual charge on non-primary residences and a potential doubling of the CGT rate on disposal gains. Pressure on both the income and exit sides simultaneously alters the investment case at a fundamental level.

Developers holding completed units or land with planning permission accumulate unrealised gains throughout the development cycle. A higher CGT rate at the end of that cycle compresses returns on projects already underway.

Overseas buyers already pay a 2% SDLT surcharge (the additional rate applied to non-UK residents purchasing residential property). A move to a 0.96% recurring annual charge compounds this over any standard hold period. The gap between UK and overseas ownership costs would widen materially in prime markets.

Second-home owners face the same 0.96% rate and the same CGT exposure. For those with holiday lets or second properties in high-value locations, the annual charge alone could exceed previous council tax bills by a wide margin.

None of this is enacted legislation yet. Burnham takes office on 20 July and policy announcements will follow. But the direction is clear, the incoming PM has backed these positions consistently, and the CGT data shows investors do not wait for a Finance Bill before acting.

Key takeaways

• Burnham became Labour leader on 17 July 2026 with 94% of MP nominations and is expected to become Prime Minister on 20 July 2026.

• He backs a 0.48% annual property tax to replace stamp duty and council tax, rising to 0.96% for second homes, overseas buyers, and empty properties - a £300,000 home would cost £1,440 per year; a £500,000 second home £4,800.

• CGT on residential property gains could rise from 24% to 40% for higher-rate taxpayers if income-tax alignment proceeds.

• CGT receipts surged 73% year-on-year in early 2026 as investors rushed to crystallise gains before further rate rises.

• 43.5% of freehold-owning companies in England and Wales have held property since before April 2016, the cohort most exposed to any CGT rate change.