Andy Burnham became UK Prime Minister on 20 July 2026, and with pressure on the public finances, attention is focused on what his government could mean for tax policy. It is widely expected that Burnham will bring many tax changes, while also sticking to the 2024 Labour manifesto commitment not to increase the headline rates of Income Tax, National Insurance, and VAT.

His early announcements suggest a focus on cost-of-living pressures and place-based policy. He has announced a 20% business rates cut for pubs, clubs, and live music venues from April 2027, alongside a cap on bus fares and the removal of VAT from domestic electricity bills for a six-month period. He has also placed homelessness and rough sleeping high on the political agenda, and promised to use whatever political capital he has on a reform of social care. Combined with his record in Greater Manchester, this points to a high-spending policy agenda focused on housing, local economies, and social care. This will likely mean tax rises so or property owners, occupiers, and investors.

Property tax reform: what could change

Hospitality business rates

The government has announced that business rates for pubs, clubs, and live music venues in England will be cut by 20% from April 2027, funded by a review of tax relief for sectors including vape shops which the government has said "do not make a positive contribution to local communities". He also hinted that warehouses and major out-of-town developments could be made to pay higher business rates. The measure is expected to benefit around 32,000 venues and save the typical pub around £1,100 a year. This suggests a move towards targeted relief for businesses that support high streets and local communities. While this may be politically attractive, it could lbe difficult to translate into tax legislation. For property owners and occupiers, this direction of travel on rates creates winners and losers depending on asset class, use, and location.

A “land value tax” or proportional property tax

Burnham has previously described the council tax and Stamp Duty Land Tax (SDLT) as “highly regressive”, with council tax in England still based on 1991 property values. He has previously expressed support for more fundamental reform of property taxation, including ideas linked to land value taxation and the replacement of SDLT. The Fairer Share proposal that has been discussed would tax a property’s overall value, with council tax and SDLT replaced by an annual charge of 0.48% of a home’s value, rising to 0.96% for second homes, empty homes, and homes owned by non-residents.

If adopted, this would mark a major change to the economics of property ownership. Removing SDLT could reduce transaction costs and potentially encourage sales and downsizing. However, replacing an upfront transaction tax with an annual ownership tax would also create new holding costs, particularly for high-value residential property, second homes, non-resident owners, and landlords. These proposals carry a risk that higher annual ownership costs could make homeownership unaffordable for some, and could reduce the attractiveness of UK property as an investment asset for investors and non-residents.

Enveloped companies and overseas investment

Another area that could attract attention is the use of companies to hold UK property. Where a buyer acquires a property directly, SDLT is generally payable on the land transaction. Where the property is held in a company, the buyer may instead acquire the shares in that company. For UK shares, that typically gives rise to stamp duty at 0.5% of the share consideration, rather than SDLT on the underlying property value.

This is a well-established feature of corporate transactions involving commercially let property and would need to be considered carefully in the context of inward investment. Overseas capital remains highly significant to the UK commercial property market: overseas inflows reportedly rose 33% year-on-year to £27.2bn in 2025 and accounted for 56% of total UK commercial property investment.

If a future government were to impose additional charges on property-rich companies, or on non-resident ownership more generally, it would need to balance any revenue-raising objective against the risk of discouraging overseas capital at a time when international investors are already sensitive to tax, financing costs and currency movements.

Capital gains tax and NIC on rental income

Property owners should also keep an eye on Capital Gains Tax (CGT) and the taxation of rental income. Ideas discussed in the media include increasing CGT rates, narrowing reliefs, or bringing aspects of investment income within a wider National Insurance-style charge. Any changes could affect disposals and landlord returns.

Next steps for property businesses

It’s clear that Andy Burnham needs to find the money for his proposals from somewhere – with the evidence pointing firmly towards higher taxes. Spending cuts are unlikely, and a substantial increase in borrowing could test the tolerance of bond markets. With those two levers largely closed, tax rises become the most likely candidate.

The most productive sources of income are already heavily taxed, and Burnham’s manifesto leaves limited room for further increases there – suggesting the tax burden could shift towards wealth and property assets.

For now, property businesses should continue to monitor developments, particularly ahead of the Autumn Budget. The measures outlined above are unlikely to be implemented together in their entirety, but they do indicate that property taxation could become a key area of focus as the Government considers how to raise further revenue.

Once the Government provides more detail, businesses will be better placed to model the impact and consider whether any action is needed.

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If you'd like to understand what these proposals could mean for you, or you want to talk through your options ahead of the Autumn Budget, our Real Estate and Construction team are here to help. Reach out via the form below and we'll get back to you.