Pulling down the ladder: The case for a proportional property tax
The UK’s current system of property taxation is unfair and outdated.
Council tax is based on 30-year-old property valuations, varies widely around the country, and is capped at relatively low property values, meaning that a multi-million-pound property in the South-East of England can attract the same tax bill as a normal family home elsewhere. Stamp duty, the widely disliked tax levied on the sale of properties, acts to ‘gum up’ the housing market and to hinder the efficient use of housing. Neither has done enough to address the enormous increase in housing wealth over the past 40 to 50 years that has been primarily concentrated in London and the South East, and disproportionately benefitted the old and already wealthy. Reform is overdue.
In this report, we set out the case to scrap council tax and stamp duty and replace them with a tax proportional to the value of the property itself – a continuation of the argument we made in our 2018 Commission on Economic Justice.
Such reform would be fairer and more progressive by addression regional inequality, wealth inequality, and would ultimately build a stronger economy across the UK.
*This report has been amended following its initial publication to include a section of text omitted during the editing process. It has no material impact on the conclusions made by the report.