This letter, written by Kevin Hollinrake MP for Thirsk & Malton, was sent to Prime Minister Boris Johnson on August 25th.
Dear Prime Minister,
Some like–minded colleagues and I would be very grateful for a few minutes of your time to discuss the importance of reforming property taxation as we seek to level up our country equitably and successfully following the cv19 pandemic.
It is my view that property taxation is long overdue radical reform. Council Tax is a poorly conceived method of funding local services and it enjoys almost no support from across the political spectrum, as reports from Institute for Fiscal Studies, IEA, IPPR and Resolution Foundation, amongst others, demonstrate. It also sees areas of the country with greater property wealth paying relatively less in Council Tax as a percentage of residential values. The effective tax rate on residential property is just 0.2% in London compared to 0.7% in the North East. Stamp Duty meanwhile acts as a simultaneous break on social mobility and willingness to downsize. Recent Stamp Duty announcements are welcome, but they have not addressed the fundamental inequities associated with taxing property transactions.
I have been working with Fairer Share, who have called for the replacement of Stamp Duty and Council Tax with a Proportional Property Tax. Their calculations suggest that, if levied at 0.48% of estimated property value, approximately 18 million households in England will see a reduction in their tax bills. This policy is revenue neutral as savings are offset by increases for multiple homeowners, foreign property investors, land banking developers and those residing in the most expensive properties (with deferral options available for the elderly and asset rich/cash poor). The campaign‘s petition has already received over 45,000 signatures, garnering a great deal of support in the regions. Some, of course, will argue that this is a wealth tax, in my view it is no more so than Business Rates, which is also a proportionate property tax.
I have discussed the proposals with colleagues and there is support for simplifying property taxation whilst making the system more equitable. It is vital, as we recover from cv19, that we continue to level up those areas repeatedly and scandalously left behind. I see this as a fair and fundamentally Conservative way to put more money back in people‘s pockets and for them to spend as they see fit as they ultimately know best. I look forward to hearing from you.
Yours sincerely,
Kevin Hollinrake MP
Member of Parliament for Thirsk & Malton
