Throughout our campaign, we have been excited by our engagement and interaction with leading MPs from across the political spectrum. After receiving a constituent’s email about Fairer Share, Colleen Fletcher MP, the member for Coventry North East, kindly put her constituent’s questions to HM Treasury.

We welcome the review of our policy undertaken by HM Treasury and feel it is only fair to them and also to our many supporters, who will want to make sure they are backing the right horse, that we examine any concerns in detail. We have responded in a Q&A format below:  


HM Treasury

The Government notes your constituent’s concern about the valuation of domestic properties for council tax. As your constituent is aware, in England homes are put into one of eight valuation bands based on their capital value on 1 April 1991, and newly constructed properties are also assigned a nominal 1991 value. This is designed to ensure that all properties are valued on a fair and consistent basis. The Government has no plans for a revaluation, which would be very complex and expensive to undertake. 

Fairer Share

The last revaluation of Council Tax was in 1991, before the invention of the internet, which makes it absurd to suggest that “all properties are valued on a fair and consistent basis”. 

If it were the case that properties are valued consistently and fairly under the current system, why does Colleen Fletcher’s constituents of Coventry North East pay 0.76% of their property value in Council Tax each year whereas Michael Gove’s constituents in Mole Valley pay just 0.44%? Even within Coventry North East there is great discrepancy between Band A which pays 0.99% and Band B which pays 0.35%.

These figures would indicate property values are in fact entrenching the inequalities of Council Tax.

At some point the Government will have to undertake revaluation. Using 1991 house values will just entrench and worsen existing inequalities and seem ever more outdated and ridiculous. 

If the Government thinks that valuation is politically difficult, then surely the best reason to undertake a valuation is to introduce a better system that brings with it serious political upside by putting cash in the hands of 76% of households. Letting this problem slip into the future is short-termist and will be harmful to the Government and the Conservative Party’s manifesto commitment to level up

We commissioned the well-respected International Property Tax Institute (IPTI) to write a 200-page deep dive into the issue of valuation. Other jurisdictions manage to provide accurate valuations of the capital values of their properties – Netherlands, New Zealand, British Ontario, New York. For a country that prides itself on data analytics and AI your concerns around valuation are insufficient. 

In IPTI’s view, the introduction of PPT poses no insurmountable technical or valuation issues. Much of the rest of the world operates similar systems and they have proved reliable and sustainable.

There are implementation costs to be considered but, in comparison with the potential revenue to be derived from PPT, they would appear to provide good value for money in terms of cost/yield ratio. The Government already collects the requisite data at the VOA. To undertake a PPT it is a case of using the data correctly.

The IPTI points out “the biggest problem likely to be encountered in connection with PPT will be at the political level. Experience has shown that many UK politicians and governments have regarded council tax reform as an area to avoid but, in IPTI’s view, the present system does not operate as effectively or as equitably as many other property tax systems around the world, so there are sound arguments in favour of reform.”

HM Treasury

The Government also notes your constituent’s concern about Stamp Duty Land Tax (SDLT). SDLT continues to be an important source of government revenue, raising several billion pounds each year to help pay for essential public services. 

Fairer Share

Our policy is revenue-neutral. Revenue from the Proportional Property Tax (£36.7 billion) recoups lost revenue from the abolition of SDLT for primary homeowners (£4.2 billion), removal of Council Tax (£31.9 billion) and miscellaneous adjustments (£0.6 billion).  In addition, HM Treasury (and local authorities) will have flexibility to increase or decrease the tax take in future years by adjusting the 0.48% rate.

HM Treasury

At Autumn Budget 2017, the Government announced further changes, which increased the price at which a property becomes liable to SDLT to £300,000 for first time buyers. This relief means that 80 per cent of first-time buyers will not pay SDLT, and 95 per cent of first time buyers who pay SDLT will benefit from the change. As you may know, the Chancellor of the Exchequer recently announced a temporary increase in the nil rate band of residential SDLT from £125,000 to £500,000. This was effective immediately and runs from 8th July until 31 March 2021. 

Fairer Share

Yes, the first-time buyer’s SDLT discount is indeed helpful but it does nothing to facilitate young families moving up the property ladder nor does it incentivise older generations to downsize to property sizes more appropriate for their life-style. Stamp duty stops families moving because it taxes at the point of transaction, thereby making the housing market less efficient. Helping people move has huge economic and social benefits, a point repeatedly made by the Chancellor.