Andy Burnham property tax reform: what commercial real estate should be watching

Andy Burnham's appointment as the UK's new Prime Minister has brought spotlight to his longstanding support for reform of taxation of land and tax. He has historically advocated against council tax, which he described as 'highly regressive' and SDLT, shifting taxation away from transactions and towards land ownership or wealth.

These sentiments were supported by other voices that criticised the current land taxes. Economist, Tim Leunig, stated that change would be 'worthwhile if it made the system more rational, but not if Burnham simply saw land as a 'big cash cow'. He explained that the land was not 'undertaxed in Britain' but rather that it was 'atrociously badly taxed'.  More recently Andy Burnham has said that plans to replace council tax and stamp duty 'won't be happening' (in the next budget)   and his spokesperson said that 'suggestions Burnham was actively considering scrapping council tax or stamp duty were 'not true'',   sending a clear signal that they will not be abolished, at least in the immediate future. 

While the debate has been focussed on whether the tax burden should be shifted away from transactional taxes towards ownership, land value and/or wider asset wealth, commentary is moving quickly and there remains uncertainty as to the extent to which reform or 'reduction' of transaction taxes are being pursued.  

Why this matters for commercial real estate    

On the face of it, the recent SDLT and council tax debate may seem to be primarily focused on residential property. 

The Conservative Party similarly continues to support abolition of SDLT on primary residences. Their proposition is narrower and seems to frame SDLT as a barrier to home ownership mobility, without offering support for corporate acquisitions or wider commercial real estate activity. 

The debate though is just as important for businesses, the tax burden affecting decisions relating to buying, holding, occupying and other uses of commercial real estate.

We have set out key commercial issues here, which ought to be monitored by landowners, developers, investors and agents as the political debate develops in the run up to the next General Election, which will be no later than 15 August 2029.

Whilst no detailed reform proposal has been published yet, the renewed focus on property taxation and uncertainty are both significant. For commercial real estate, even a partial shift away from transaction-based taxes towards ownership, land value or property use could have practical consequences for pricing, viability, holding strategies and portfolio management.

At this stage, it is important not to assume a particular outcome, but to recognise that the direction of travel matters. Landowners, developers, investors and agents should continue to monitor the debate closely and consider how emerging proposals could affect both existing assets and future investment decisions