Burnham actively considers scrapping council tax and stamp duty. What impact does this have on UK BTL Investors?

As at 27 July 2026, Prime Minister Andy Burnham’s Government is reportedly considering alternatives to council tax and stamp duty. Fairer Share’s Proportional Property Tax, or PPT, is said to be one of two models under consideration, alongside a Land Value Tax.

That does not make either model Government policy. No reform has been adopted, no legislation has been introduced and no final design has been published. The rates, exemptions and transition arrangements discussed below belong to Fairer Share’s campaign proposal, not an enacted tax system.

Even so, buy-to-let landlords should understand the proposal. Moving an annual property tax from tenants to owners could materially change cash flow, rent calculations, mortgage affordability and the relative appeal of different properties.

The direct analysis here is mainly England-specific. Council tax and residential transaction taxes are devolved in Scotland, Wales and Northern Ireland.

What is Fairer Share proposing?

The Fairer Share campaign proposes replacing council tax with an annual charge based on a property’s regularly updated current value. The legal responsibility for paying it would move from occupiers to property owners.

Under its published Proportional Property Tax proposal, the suggested annual rates are:

• 0.48% for owner-occupied main homes
• 0.96% for second homes, empty homes, holiday lets and foreign-owned investment properties

For landlords, 0.96% is therefore the important illustrative rate. However, a future Government scheme could use a different rate, tax base or property classification.

Fairer Share also proposes abolishing Stamp Duty Land Tax on owner-occupied homes. Its property tax FAQ says Stamp Duty would remain for second-home and foreign-home buyers.

Buy-to-let investors must not assume that SDLT, including the higher rates applying to additional dwellings, would disappear on their purchases. That point would depend on the final definitions and legislation, neither of which exists.

The campaign says 77% of properties would pay less under PPT than under council tax. That is Fairer Share’s modelling, rather than an established outcome for individual owners or landlords.

What could PPT cost a landlord?

At the campaign’s proposed 0.96% investment-property rate, the annual charge rises directly with the property’s value.

Property value	Annual PPT at 0.96%	Monthly equivalent
£150,000	£1,440	£120
£200,000	£1,920	£160
£250,000	£2,400	£200
£300,000	£2,880	£240
£500,000	£4,800	£400

These figures are straightforward illustrations, not forecasts of a landlord’s final bill. The valuation date, review frequency, reliefs, thresholds and treatment of different letting structures remain unknown.

The calculation also cannot be assessed in isolation. Investors need to compare the potential PPT bill with the council tax currently attached to each property.

A worked comparison framework

Consider an English buy-to-let worth £250,000. At 0.96%, the proposed PPT would be £2,400 a year, or £200 a month.

Suppose its current council tax bill is £1,800 a year and is normally paid directly by the tenant. The initial comparison would be:

• Current owner cost for council tax: normally £0 during a standard occupied tenancy
• Current tenant cost: £1,800 a year
• Illustrative landlord PPT cost: £2,400 a year
• Difference entering the landlord’s accounts: £2,400 a year before any rent change
• Difference between the two property taxes: £600 a year

The £600 difference does not capture the landlord’s full cash-flow impact. Under the present arrangement, the tenant pays the £1,800 council tax separately. Under PPT, the owner would become responsible for the full £2,400.

If the landlord increased rent by £150 a month, gross rent would rise by £1,800 a year. The landlord would still absorb £600 of the PPT before considering tax, arrears, void periods or additional management charges. The tenant’s combined rent and property-tax-related outgoings might be broadly unchanged, assuming council tax had been removed and there were no other changes.

A £200 monthly rent increase would nominally recover the entire PPT. Whether that is commercially achievable is a separate question.

This framework should be applied property by property:

1. Estimate PPT using a sensible current value.
2. Record the property’s actual council tax bill.
3. Establish who currently pays that bill and when the landlord becomes liable.
4. Test several rent-recovery assumptions, including 0%, 50% and 100%.
5. Allow for tax, letting costs, arrears and voids.
6. Stress-test a higher valuation and a lower achievable rent.

Why landlords may not recover the full cost through rent

Fairer Share accepts that landlords could pass some or all of PPT to tenants through higher rent. It argues that many tenants could still benefit because they would no longer pay council tax directly.

There is no automatic mechanism allowing a landlord to recover the charge, however. Rent is constrained by local affordability, competing supply, tenancy terms and the property’s condition and location.

A tenant currently paying £1,600 rent plus £170 council tax may focus on the combined £1,770 monthly cost. If council tax disappears, a landlord might seek rent closer to that total. But competing landlords may absorb more of the tax, while tenants may expect to share the saving.

Existing tenancies create another limitation. Landlords cannot simply add a new charge whenever a tax bill changes. Any rent increase would have to follow the tenancy agreement and the applicable legal process. Even where an increase is legally possible, the local market may not support it.

This creates a difference between contractual liability and economic incidence. The landlord may be legally responsible for PPT, but its ultimate cost could be divided between landlord and tenant through rent-setting and negotiation.

Geography and property values would matter more

Council tax still reflects historic valuation bands. A regularly updated percentage charge would respond more directly to current market values.

That could shift costs towards higher-value properties, including homes in London, the South East and expensive city neighbourhoods. Two properties producing similar rents could face very different PPT bills if one has a much higher capital value.

Gross yield would consequently become more important. A £500,000 property producing £24,000 annual rent would face an illustrative £4,800 PPT charge, equal to 20% of gross rent. A £200,000 property producing £14,000 would face £1,920, or just under 14% of gross rent.

This does not mean lower-value property would always perform better. Maintenance, tenant demand, licensing, insurance and financing still matter. It does mean that a value-based annual tax could weaken the cash-flow case for low-yielding, high-value assets.

Regular revaluations could also make costs less predictable. Rising prices would produce higher bills even where rent had not increased at the same pace.

Acquisitions and Stamp Duty uncertainty

The proposal could change transaction incentives, but investors should not build acquisition plans around the abolition of SDLT.

Fairer Share proposes removing SDLT for owner-occupied homes while retaining Stamp Duty for second-home and foreign-home buyers. The treatment of every form of buy-to-let acquisition has not been set out in Government legislation because no Government scheme exists.

For prudent underwriting, investors should therefore:

• retain SDLT and the applicable additional-dwelling rates in purchase budgets
• add an illustrative annual PPT cost at 0.96%
• test whether the rent supports both costs
• avoid treating campaign material as a confirmed tax saving

If SDLT remained while PPT was introduced, landlords could face both a substantial acquisition tax and a new recurring owner liability. That combination would affect the price they could rationally offer.

Disposals and portfolio restructuring

A value-linked annual charge could encourage some landlords to sell expensive, low-yield properties and redirect capital towards higher-yielding areas. It might also make mixed portfolios more attractive where tax exposure is not concentrated in one high-value market.

But restructuring has costs. Selling can trigger estate agency and legal fees, early repayment charges and potentially Capital Gains Tax. Purchasing replacements may still incur SDLT. Incorporation or transfers between connected parties can have separate tax and financing consequences.

Landlords should not restructure solely in response to a reported policy discussion. A more useful exercise is to identify assets that would become marginal under several PPT scenarios. Those properties can then be reviewed alongside refinancing dates, planned works and existing disposal objectives.

Fairer Share proposes capping increases for existing owner-occupiers at £1,200 a year until sale. Investors should not assume that this transition protection would apply to buy-to-let property.

Valuation disputes could become a practical issue

A tax based on regularly updated values requires a valuation system. Important unanswered questions include:

• who would determine the taxable value
• how often properties would be revalued
• whether valuations would be individual or modelled in bulk
• how extensions, disrepair and lease length would be treated
• what evidence owners could use in an appeal
• whether tax would remain payable while a dispute was considered

Valuation uncertainty could be particularly relevant for unusual homes, flats affected by building defects, short-lease properties and houses converted into several units.

Landlords would need accurate records of condition, floor area, lease terms and comparable sales. A headline portal estimate may not be reliable enough for tax planning or a formal challenge.

Mortgage affordability and lender calculations

A recurring owner-paid property tax would reduce net rental income unless it could be recovered fully through rent.

Lenders might respond by including PPT as a specific property expense when assessing affordability. That could affect interest coverage calculations, maximum loan sizes and refinancing options, especially for highly leveraged or lower-yielding properties.

Even if rent rose, lenders might not accept the full increase immediately. They could require evidence from a tenancy agreement, valuer’s rental assessment or payment history. Some may stress the tax as an expense while applying their existing haircut to rental income.

Investors approaching a fixed-rate expiry should therefore test refinancing with the PPT included as a non-recoverable cost. This is not because lenders have adopted that treatment, but because it reveals how much financial headroom the property has.

What landlords should do now

There is no enacted reform to respond to, so immediate tax-driven action would be premature. The sensible response is scenario planning rather than prediction.

Practical checklist

• Confirm the current council tax bill for every English property.
• Record whether the tenant or landlord currently pays it.
• Estimate each property’s current market value using a reasonable range.
• Model PPT at 0.96%, including a higher-value stress case.
• Compare PPT with the actual council tax attached to that property.
• Test no rent recovery, partial recovery and full recovery.
• Check when and how rent can lawfully be reviewed.
• Recalculate net cash flow, yield and mortgage interest cover.
• Identify high-value, low-yield properties with limited rent flexibility.
• Keep SDLT and additional-dwelling costs in acquisition budgets.
• Do not assume owner-occupier transition protections apply to BTL.
• Monitor official Government announcements, draft legislation and consultations rather than relying on campaign proposals alone.

PPT could transfer a visible household bill from tenants to property owners and make current values more important to annual holding costs. For landlords, the central question is not simply whether the proposed tax is higher or lower than council tax. It is how much can be reflected in rent, how lenders treat the expense and whether each property still produces an acceptable return.

This article is general information, not financial, tax or legal advice. The policy discussed is reportedly under consideration and has not been adopted or legislated. Obtain professional advice before changing a property, financing or tax strategy.