Londoners face £1,000 property tax rise as Andy Burnham set to become Prime Minister

London was braced for a huge property tax blow as Andy Burnham was set to replace Sir Keir Starmer as Prime Minister.

Within hours of Sir Keir announcing he was resigning, London Mayor Sir Sadiq Khan issued a warning to Mr Burnham not to axe investment in the city, stressing that the whole of the country benefited from a thriving capital.

Concerns were rising that the former Greater Manchester Mayor could adopt anti-London policies as he seeks to channel billions more in public funding to the regions.

One measure which could hit wealthier people in London, if as expected Mr Burnham gains the keys to No10, is if he presses ahead with a land value levy to replace council tax and stamp duty.

The major reform, which Mr Burnham has previously supported, could mean an extra £1,000 in property tax for hundreds of thousands of Londoners.

A land value levy is likely to impact on London hardest, just as the new “mansion tax” has given that the city is more wealthy than other regions.

Mr Burnham could be Prime Minister within weeks after Sir Keir resigned on Monday, becoming the shortest serving Labour Prime Minister.

Following his decisive victory in the Makerfield by-election, Mr Burnham was expected to be given a “coronation” to become Labour leader and Prime Minister after former Health Secretary Wes Streeting, MP for Ilford North, said he would not challenge him in a contest.

Given the pace of change at the heart of Government, millions of people across Britain were scrambling to work out what a Burnham government will mean for them.

One measure he has backed in the past is a land value tax (LVT) to replace council tax, and possibly stamp duty.

“I’ve long been persuaded of the argument for a land value tax,” he said recently.

“I’m personally keen to see reform of council tax.

“It’s a highly regressive tax. I see a big case for land and property and business taxation to be changed.”

Five years ago, he argued: “There is a really interesting discussion about how we reform property tax.

“The party can’t tiptoe around it any more. Council tax is bearing too much weight.”

Sixteen years ago, when Mr Burnham launched his first attempt to be Labour leader, he said: “The LVT, an annual tax on the market rental value of land, would allow for the abolition of stamp duty - a tax on the aspiration of young people to put down roots and get on with life.”

If council tax alone was replaced by a land value levy, on a cost neutral basis to the Treasury, people on higher salaries in the country would pay around £1,000 more, according to a Policy Engine analysis by Vahid Ahmadi and Max Ghenis.

Their research concluded that the bottom income decile (the poorest tenth) in the country would gain £481 a year on average, which could include some Londoners in more deprived communities.

They also found that the ninth decile, or the second-richest tenth, would face a higher property tax bill of £991 and the top decile a figure of £966.

Many people in these two groups live in the capital.

Separately, a third runway at Heathrow could be thrown into jeopardy, especially if Ed Miliband becomes Chancellor.

Net Zero Secretary Mr Miliband has previously opposed a bigger Heathrow and Mr Burnham has argued such airport investment should happen in the regions.

However, ditching the plans for another runway at the west London airport would be unpopular with some unions.