Published on 8 July 2026
Andy Burnham is reportedly in favour of the Proportional Property Tax proposed by the Fairer Share Campaign.
The crux of any recurring property tax is how unpaid charges are handled. Council tax arrears follow the person, not the property, whereas the Fairer Share proposal explicitly allows owners to defer payments, which accrue as a charge on the property.
This raises questions about the accrued liability. If unpaid tax becomes a statutory charge ranking behind the lender, there may well be an impact on the ability to remortgage or obtain a new mortgage. This is due to a lender’s duty of care to subordinate creditors in the event of a forced sale.
If the unpaid tax is ranked ahead of the lender, it will create huge problems for the UK market. Asset-rich, cash-poor owners may not be able to afford the charge, hence the proposal for deferment.
If deferred charges accrue interest, and if the rolled-up charge takes priority over a mortgage, then the lender’s loan-to-value (LTV) cushion will erode over time.
The proposed 0.48% annual charge, deferred and compounded over 15 years, could accumulate to around 10% of the property value.
Even where the tax is paid and not rolled up, we expect to see a drop in house prices as the annual tax amount is capitalised into lower property values. This will have the effect of raising LTV ratios across existing mortgage books.
Any property tax will affect new lending as an annual charge tightens affordability, lowering what people can borrow.
And we have not even mentioned that Fairer Share wants the tax to be paid by landlords, not tenants, which would be disastrous for the private rented sector (PRS).
It is hard to conceive of any government seeking to put not only our housing market at risk but also our PRS. Any government that did might face a tough time at the next election.
Charles Curran, principal, Maskells
Read the Article in Property Week