Could Andy Burnham scrap stamp duty?

A significant story is unfolding on the international scene. Could Andy Burnham scrap stamp duty? Image source, PA MediaImage caption, Andy Burnham is set to become prime minister later this monthByJames GregoryPublished4 hours agoSince Andy Burnham emerged as prime minister-in-waiting, there have been few clear details as to what we could expect to see from a government led by the MP for Makerfield. The former mayor of Greater Manchester has promised to stick to Labour's 2024 manifesto pledges not to raise income tax, VAT and national insurance but has suggested there could be "some movement" with possible increases to business rates on warehouses to fund tax cuts for pubs and some high-street businesses.

And when he launched his campaign to return to Parliament in May, Burnham indicated he wanted to change how property and land is taxed. One of the measures Burnham has advocated in the past is scrapping stamp duty and replacing it with a land value tax (LVT) - an annual levy based solely on the value of the land itself, excluding any buildings or improvements on the property. Another proposal he has reportedly backed is a proportional property tax - an annual tax based on a percentage of the property's value.

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It's not clear that just because he's endorsed property tax reform that he'll definitely implement changes in government, but we've asked some experts for their view. Land value tax vs stamp dutyStamp duty is a tax paid by home buyers on properties or land worth over £125,000, or £300,000 for first time buyers, in England and Northern Ireland. The Institute for Fiscal Studies, an independent think tank, has described it as "one of the most economically damaging taxes", while Kemi Badenoch said last year a Conservative government would abolish the levy on main homes.

Burnham too has been critical of the tax, instead favouring an LVT. "The LVT, an annual tax on the market rental value of the land, would allow for the abolition of stamp duty - a tax on the aspirations of young people to put down roots and get on in life," he wrote in the Guardian during his first bid for the Labour leadership in 2010. In the 16 years which have followed, Burnham has repeatedly called for reforms to property taxes.

But being in favour of property tax reform and then enacting it in government when confronted with the political and practical reality are two different things. Economists are broadly united in their contempt for stamp duty, largely because they say it penalises transactions. "More or less any property tax or local tax is going to be better than stamp duty," says Stuart Adam from the IFS.

"What stamp duty does is discourage people from buying and selling. "He argues that a land tax is an efficient way of raising revenue because land is in fixed supply, visible and identifiable, and cannot leave the country. There are no "damaging disincentive effects", with the LVT not having an impact on behaviour at all, he says.

The story has become one of the most prominent items on the global agenda.