Keir Starmer resigned as Prime Minister of the United Kingdom and leader of the Labour Party on Monday, 22 June 2026. Property owners should be watching closely to see who takes his place.
One of the leading candidates to succeed him, Andy Burnham, supports a property tax reform that would replace both Stamp Duty Land Tax (SDLT) and Council Tax with an annual levy. Under proposals associated with him, second homes, overseas-owned properties and long-term empty homes could face charges of 0.96% of their value every year.
Nothing has been legislated, and there is no guarantee Burnham will become the next Prime Minister. However, the prospect of a 0.96% annual property tax has put property taxation firmly on the agenda.
This article explains how Starmer's resignation could impact the UK property landscape and what property owners should be watching as the Labour leadership contest unfolds.
Key Takeaways
- UK Prime Minister Kier Starmer resigned on 22 June 2026
- This has triggered a leadership contest within his Labour Party - nominations open on 9 July 2026, and a new leader could be in place as early as 16 July 2026 if Andy Burnham is elected unopposed; if the contest goes to a membership vote, the result is expected on 1 September 2026
- Burnham is the leading contender to succeed Starmer and has backed the Fairer Share campaign's "proportional property tax," under which, most properties will be charged an annual levy of 0.48% of their value, rising to 0.96% for second homes, foreign-owned properties and long-term empty homes
- This proposal would replace both SDLT and Council Tax
- This would shift property tax from a one-off transaction cost (SDLT, paid once on purchase) to a recurring annual charge on
- The biggest impact would fall on landlords, holiday-home owners and overseas buyers
- Supporters of the Fairer Share proposal argue that around 75% of owner-occupiers would pay less overall, with most of the savings concentrated outside London and the South East
- Importantly, none of this is law; no formal reforms have been announced
- SDLT under the Finance Act 2003 and the higher rates for additional dwellings under Schedule 4ZA of the Finance Act 2003 remain fully in force for property purchases completing today
Why Does It Matter for the UK Property Sector That Keir Starmer Resigned?
Keir Starmer's resignation matters to the UK property sector because it increases the likelihood of significant property tax reform. His departure could bring to power a Prime Minister (Andy Burnham) who supports replacing both SDLT and Council Tax with an annual property tax based on a property's value.
For now, nothing has changed in law. SDLT is still charged under the Finance Act 2003, the 5% higher rate for additional dwellings still applies under FA 2003 Sch 4ZA, and the 2% non-resident surcharge remains in force under FA 2003 Sch 9A. If you complete a property purchase tomorrow, you will pay exactly the same taxes as you would have paid last week.
What has changed is the political landscape. Announcing his resignation outside 10 Downing Street on 22 June 2026 after Labour's poor local-election results and Burnham's by-election victory in Makerfield on 18 June 2026, Starmer effectively opened the door to a new direction for government policy. He remains caretaker Prime Minister while the leadership contest takes place, but Burnham is widely regarded as the frontrunner to succeed him.
That matters because Burnham has been openly critical of the current property tax system. He has described Council Tax as regressive, questioned its reliance on 1991 property valuations, and backed proposals to replace both Council Tax and SDLT with an annual percentage-of-value levy.
For landlords, second-home owners and overseas investors, that is the key issue. The resignation itself does not affect your property taxes. But the possibility of a new Prime Minister considering fundamental taxation reform does.
What Property Tax Reform Is Andy Burnham Proposing?
Andy Burnham supports replacing both SDLT and Council Tax with an annual property tax based on a property's value. Under the campaign group Fairer Share’s model that he has backed, most properties would be charged 0.48% of their assessed value each year, while second homes, overseas-owned properties and empty properties would pay double that, i.e., 0.96% annually.
If that sounds like a major change, that's because it is. Today, property owners pay SDLT when they buy and Council Tax each year thereafter. Under the Fairer Share proposal, both taxes would disappear and be replaced by a single annual levy linked to the property's present value. Renters would not pay the charge directly; it would fall on the property owner.
Supporters see this as a fairer way to tax property. Fairer Share estimates that around 75% of households would pay less overall, with most of the savings concentrated outside London and the South East. The idea is that owners of higher-value properties would contribute more, while households in lower-value areas would pay less than they do under the current system.
However, the proposal is likely to divide opinion among landlords and investors. Under today's rules, SDLT is a one-off cost that arises when you buy a property. An annual property tax, however, would work very differently. As Knight Frank, the global real estate consulting agency, and their research team have noted, it could turn house-price growth into a recurring tax liability, meaning owners face ongoing tax costs as values of their properties rise.
For owners of second homes, holiday lets and UK property held from overseas, the proposed 0.96% rate is likely to be the figure attracting the most attention.
How Much Could the 0.96% Annual Property Tax Cost You?
This is where the abstract becomes concrete. The figures below compare what an additional-property buyer pays today under Stamp Duty Land Tax (SDLT) with what the proposed annual levy would cost over a typical hold period. All SDLT figures use the 2025/26 rates in force in England and Northern Ireland.
Example 1: Jill, a Leeds landlord buying her fourth let
Jill already owns three rental flats and is buying a fourth in Leeds for £320,000 to hold for her retirement, maybe 15 years out. She is a UK resident, so this is an additional-dwelling purchase. Here is what the two systems cost her.
1. Today (SDLT Paid Once On Purchase)
Standard residential bands plus the 5% higher rate for additional dwellings (FA 2003 Sch 4ZA):
Band | Rate (Inclusive of 5% Surcharge) | SDLT |
|---|---|---|
£0 – £125,000 | 5% | £6,250 |
£125,001 – £250,000 | 7% | £8,750 |
£250,001 – £320,000 | 10% | £7,000 |
Total SDLT | £22,000 |
2. Under Fairer Share’s Property Tax Proposal
0.96% annual levy on a second/let property = 0.96% × £320,000 = £3,072 per year
Hold Period | Cumulative Annual Levy | vs Today's SDLT |
|---|---|---|
Year 1 | £3,072 | Cheaper |
Year 7 | £21,504 | Roughly Equal |
Year 15 | £46,080 | More expensive |
For Jill, the crossover lands at about seven years. Because she is a buy-and-hold landlord, the proposed levy would cost her more than double today's SDLT over her intended 15-year hold, and that is before any annual revaluation of her property’s value pushes the tax bill higher. Meanwhile, a landlord flipping the same flat inside three years would pay far less under the proposal than under SDLT. The longer you hold, the worse the annual levy looks.
Example 2: Daniel, a Dubai-based property investor buying a London pied-à-terre
Daniel lives and works in Dubai and is buying a £600,000 flat in London as a long-term investment and occasional bolthole. Because he is a non-UK resident and already owns property overseas, his purchase falls into the higher SDLT regime.
Under current rules, he would pay SDLT under the Finance Act 2003, plus the 5% additional dwelling surcharge under FA 2003 Sch 4ZA and the 2% non-resident surcharge under FA 2003 Sch 9A. On a £600,000 purchase, this results in a total upfront tax bill exceeding £70,000.
Under the proposed system, that upfront tax would be replaced entirely. Instead, Daniel would pay an annual charge of 0.96% of the property's value because he is a non-resident owner. On a £600,000 property, that equals £5,760 per year.
The difference is not just the headline cost, but the structure of taxation. Today, Daniel pays a large one-off entry cost at the point of purchase. Under the proposed reform, that barrier disappears, but is replaced with a recurring annual liability that continues for as long as he holds the property.
On a simple comparison, the break-even point sits at just under 13 years. After that point, the cumulative annual charges would exceed the one-off SDLT bill. Before that point, the proposed system would be materially cheaper at entry but increasingly costly over time.
For overseas investors with shorter holding periods, the reform would significantly reduce upfront friction. For long-term holders, it would effectively convert a one-off acquisition tax into an ongoing ownership charge that rises with property values over time.
Who Wins & Who Loses Under the Annual Property Tax Proposal?
The reform is deliberately redistributive, so the answer depends entirely on what you own and where.
Likely to Pay More
- Owners of second homes and holiday lets
- Non-resident owners of UK property
- Owners of empty or vacant properties
- Owners of higher-value homes in London and the South East
The doubling to 0.96% is aimed squarely at the first three groups.
Likely to Pay Less
Owners of a single main residence in lower-value areas, particularly across the North, the Midlands and Wales-adjacent English regions, where Council Tax on a modest home can currently exceed the bill on a far more expensive London property.
The Group that Needs to Model Carefully
Portfolio landlords and anyone holding UK property from abroad. For this group the change is not a percentage tweak but a different kind of tax. A 7-property portfolio that paid its SDLT years ago would face a fresh, recurring annual liability it has never budgeted for. This is the scenario where a specialist projection earns its fee, and it is the core of what we do for non-resident landlords.
Hold a Portfolio or Own UK Property from Overseas?
The shift from a one-off SDLT bill to a recurring annual levy changes the economics of a long hold. As UK property experts serving landlords across the UK and internationally, we can model your exposure under both systems.
What Should Property Owners Do Before Any Property Tax Reform Lands?
Nothing here is law, and acting on rumours will be a mistake. Nevertheless, property owners, both UK-resident and non-resident, should take the following three steps to stay ahead of future developments.
- Understand Your Current Position - If you are buying now, the SDLT you pay is fixed and knowable today. Model it before you commit, because the higher-rate and non-resident rules are where buyers most often overpay or underpay. Our SDLT Calculator gives you the band-by-band figure in seconds, including the 5% additional-dwelling and 2% non-resident surcharges.
- If You Have Already Bought & May Have Overpaid, Check Now - The 5% higher rate is frequently applied when it should not be, such as on replacement of main residences, on uninhabitable property, on annexes within the one-third value rule. A refund claim under FA 2003 Sch 4ZA must be made within strict time limits, and those windows close regardless of what happens in Westminster.
- If You Hold a Portfolio or Own from Overseas, Get a Projection - The difference between a transaction tax and an annual levy reshapes the economics of a long hold. Understanding your exposure under both systems lets you decide calmly rather than react to a headline.
Conclusion
There is no certainty that the reforms discussed here will happen, and no indication it will be introduced soon. Andy Burnham has not yet won the Labour leadership, no draft legislation has been published, and key technical details such as valuation methodology have not been developed. Any change of this scale would require full policy design, primary legislation, and implementation across HMRC and local taxation systems. And that takes a lot of time.
What has changed is the direction of debate. The idea of shifting property taxation from transactions to ongoing asset-based charges is now part of mainstream policy discussion.
For property owners, the sensible approach is not to assume change, but to stay prepared. Understand current SDLT and Council Tax exposure, and consider how different holding periods would be affected under a value-based annual tax. It is not a moment for panic, but it is a moment for awareness.
FAQs
No. The Keir Starmer resignation on 22 June 2026 changed the political outlook, not the law. SDLT under FA 2003, the 5% higher rate for additional dwellings under FA 2003 Sch 4ZA, and the 2% non-resident surcharge under FA 2003 Sch 9A all remain fully in force.
It is a proportional property tax promoted by the Fairer Share campaign. SDLT and Council Tax would be abolished and replaced with an annual levy of 0.48% of a property's value, doubling to 0.96% for second homes, non-resident owners and empty properties.
For long-term holds, very likely yes. A landlord pays SDLT once at purchase, but the proposed levy is charged every year. On a £320,000 fourth let, today's £22,000 SDLT is matched by the 0.96% annual levy in about seven years; hold longer and the landlord pays more, before any uplift from annual revaluations.
Non-UK residents are explicitly named in the proposal as paying the higher 0.96% rate, the same band as second homes and empty properties. Today, a non-resident buyer pays the 2% surcharge (FA 2003 Sch 9A) once on purchase. Under the proposal, they would face a recurring annual charge for as long as they own the property.
Labour leadership nominations open on 9 July 2026. If Andy Burnham is the only candidate to reach the 81-MP nomination threshold, the contest concludes at the close of nominations on 16 July 2026. If it is contested, a new leader is due by 1 September 2026.
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