Friday 26 June 2026 1:32 pm
| Updated:
Friday 26 June 2026 1:42 pm
The tax takes effect in April 2028 but the market is already reacting
Replacing Stamp Duty and council tax with a proportional property tax will make London’s housing market work better, says Andrew DixonIf a “London tax grab” were on the cards, Londoners would rightly be wary. They already face high rents, high mortgages and some of the largest tax bills in the country.Yet Fairer Share’s Proportional Property Tax (PPT) proposal is anything but. Far from that crude label – used by Charles Amos in a recent column – it is a long-overdue change Londoners should me.A PPT would replace broken Stamp Duty and Council Tax with one fairer annual tax, based on current property values.Scrapping Stamp Duty is among the most pro-London reforms imaginable. It penalises and discourages young people from getting on the ladder, growing families securing space they need, and older people downsizing. It hits London especially hard – a £5.1 bn annual penalty for moving, gumming up the market. That amounts to over a third of the Exchequer’s Stamp Duty receipts across the whole of England and Northern Ireland. That is a huge burden on one city, falling directly on people simply trying to find the homes they need.Council Tax is just as indefensible, with decades-old tax bands that pretend house prices haven’t changed since 1991. London’s market has morphed beyond recognition since. Uneven price growth and council priorities have created absurd tax inequalities, across not just Britain but across London itself. Peckham’s teachers and nurses can pay more than oligarchs in far pricier homes in Westminster.A switch not a grabFairer Share’s plan is therefore a tax switch, not a tax grab. Nor would change happen overnight for homes benefiting from current inequalities, with a cap on annual increases until owners sell. The new buyer, who’ll save significantly from stamp duty’s abolition, will then pay the fair proportionate rate. Meanwhile cash-poor homeowners could defer payment, ensuring no-one is forced to sell.London’s many renters, struggling with high housing costs, would benefit significantly, too. Liability would shift to homeowners, stopping renters paying taxes on properties that aren’t theirs. A PPT would ask more of those who clearly should contribute more – with a higher surcharge on under-used and investment properties – namely overseas owned, empty and second homes.There is another London-specific fairness point: land value capture. Public investment and decision-making has fuelled much of London’s property wealth, creating enormous private gains. Transport upgrades, schools, hospitals, public realm improvements and planning decisions all lift nearby land and property values. The Elizabeth line alone was partly funded through London business rates. Studies show property values rose significantly along Crossrail’s route. So the public deserve a modest share of such unearned wealth to fund public services.More broadly, London needs a housing market that works. Critics present the choice as reform versus no-need-for-reform. That is patently false – the status quo is totally outdated, inefficient and unfair. Londoners are already living with the consequences of a broken system: punitive Stamp Duty, outdated Council Tax, unfair bills between boroughs, and a housing market that traps too many people in the wrong homes.
