Council Tax & Stamp Duty reform isn’t politically toxic. Our new polling shows why
By Andrew Dixon, Founder and Chairman of Fairer Share
For more than three decades, governments on all sides of the political spectrum have known that Council Tax is broken. Yet reform has repeatedly been put in the “too difficult” box. The conventional political wisdom is easy to understand. Property taxes are visible, homes are people's most valuable assets and reform inevitably creates winners and losers. Politicians therefore assume that even discussing fundamental reform risks provoking a backlash.
Our new polling suggests that assumption is wrong. Research conducted for Fairer Share by JL Partners finds that nearly two-thirds of Britons (63%) believe the current Council Tax system is unfair, while just 25% think it is fair.
This isn't simply an abstract concern about tax design. Council Tax has become a cost-of-living issue. When people were asked which measures the government should prioritise to ease pressure on household finances, reducing or replacing Council Tax came second, selected by 34% of respondents and beaten only by reducing energy bills.
The public is more open to reform than Westminster thinks
Perhaps the most striking finding comes when people are presented with an actual alternative. We explained Fairer Share's proposal to abolish Council Tax and Stamp Duty and replace them with an annual proportional tax based on current property values, with owners rather than tenants responsible for paying and protections for households with valuable homes but limited incomes.
47% supported it with only 13% saying they opposed it. That is almost four supporters for every opponent.
The polling also showed that there’s no evidence of the geographical backlash that is often assumed. Support is remarkably consistent across England and, perhaps surprisingly, is actually highest in London at 49%.
The political significance goes beyond the headline numbers. Of the relatively small group who oppose the proposal, only 14% say they do so because they prefer the existing Council Tax system. Their principal concerns are practical: whether their bills might rise, how high-value properties would be treated, whether valuations would be accurate and whether future governments could increase the tax rate.
In other words, the public isn't saying “don't touch Council Tax.” It is saying “show us how you would reform it safely.”
That is a very different political problem.
The political implications are particularly striking
Asked specifically about voting intention, the reform produces a net increase in willingness to consider voting Labour among Labour (+44), Green (+36), Liberal Democrat (+20) and Conservative (+15) voters, with Reform voters again largely unmoved (+5). The polling therefore suggests that engaging seriously with property tax reform need not carry the electoral penalty often assumed and could potentially help Labour consolidate its existing coalition while reaching voters beyond it.
Reform could help get Britain moving
There is also a danger that the debate becomes entirely about who pays more and who pays less. Property tax reform could deliver a much broader economic benefit.
Stamp Duty is a tax on moving home. It penalises a young family that needs more space, an older couple wanting to downsize and someone who needs to move across the country for a new job. Our polling shows just how acutely that barrier is felt. Among people currently buying a property, 68% said abolishing Stamp Duty would make purchasing a home easier. Among those thinking about buying, the figure was 65%.
Replacing Council Tax and Stamp Duty with a proportional annual property tax therefore isn't simply about making taxation fairer. It would remove a major transaction tax, improve housing mobility, encourage better use of the homes we already have and make it easier for people to move to where economic opportunities exist.
At a time when the Government is searching for ways to increase economic growth, that deserves serious examination.
Caution is sensible. Inaction isn't
The Prime Minister was right not to rush into fundamental property tax reform without understanding the consequences. Homes are people's largest assets. Valuations need to be credible. Those who are asset-rich but cash-poor need protection. Changes should be phased so households aren't confronted with sudden increases. And the consequences for local government finance and the housing market need to be properly understood. These are legitimate concerns.
But they are arguments for careful reform, not permanent inaction.
Indeed, our polling suggests that addressing those concerns is precisely how wider public support can be built. That is why Fairer Share is calling for an independent, evidence-led review of Council Tax and Stamp Duty.
Such a review should examine the available alternatives, their distributional consequences, the impact of abolishing Stamp Duty on housing and labour mobility, the valuation infrastructure required and the transitional protections necessary to ensure reform is fair. It need not commit the Government to Fairer Share's solution, or any other, before the evidence has been examined.
But it would recognise something increasingly difficult to ignore: a tax based on property values from 1991 cannot remain untouched indefinitely. The most important message from our polling is that voters recognise the existing system is unfair, are open to a serious alternative and want politicians to engage with the problem.
For years, the political assumption has been that touching Council Tax is simply too dangerous. The evidence increasingly suggests that the greater political risk may be doing nothing at all.
If you agree, Email Your MP to call on them to back the proportional property tax here. It only takes 30 seconds with our online tool.
The tide is turning on property tax reform
For decades, reforming how we tax property has been filed under "too hard." Council Tax was untouchable. Stamp Duty raised too much to give up. So governments tinkered at the edges and left the structure alone.
That's starting to change. Over the past few days, think tanks, economists and journalists have all made the case for serious reform. They come at it from different angles, but keep landing in the same place: Britain taxes property badly, and Council Tax and Stamp Duty need to be looked at together.
The most recent push comes from IPPR, which argues that an ageing population needs a new fiscal settlement, one that leans less on work and on younger generations. Its answer: replace both Council Tax and Stamp Duty with a proportional annual property tax.
This isn't a new position for IPPR. Its earlier modelling looked at exactly this, and found that swapping the two taxes for a Proportional Property Tax could cut bills for around three-quarters of households, get the housing market moving and add billions to GDP.
Tax Justice UK gets to much the same place. It calls Council Tax a regressive system propped up by decades of political fixes, and wants it replaced with a proportional tax based on what homes are actually worth today. It would also scrap Stamp Duty for people buying a home to live in.
One problem, two taxes
Council Tax still values homes on 1991 prices, and asks people in modest properties to pay proportionately far more than the owners of some of the most valuable homes in the country.
Stamp Duty gets it wrong from the other end. Instead of taxing ownership sensibly, year by year, it drops a large bill on people at the exact moment they try to move. That puts off the older couple who'd downsize, the growing family who need more space, and the worker chasing a job in a new city.
Treating the two as separate problems makes less and less sense.
There's movement in Parliament too, though it predates this latest wave. Earlier this year, the cross-party Housing, Communities and Local Government Committee called on the Government to consult on alternatives to Stamp Duty. Chaired at the time by Florence Eshalomi MP, it also said any reform should sit alongside Council Tax reform rather than happen in isolation.
The wider economic argument is shifting the same way. James Kirkup of the Social Market Foundation puts it plainly: when a government needs to raise money, why keep loading tax onto work and activity while one of the country's biggest stores of wealth is still taxed through a system designed more than thirty years ago?
So the question isn't how to make Council Tax a little less unfair, or how to abolish Stamp Duty on its own and claw the money back somewhere else.
It's to reform them together. Replace Council Tax and residential Stamp Duty with a single proportional tax based on current property values, paid by owners rather than tenants, with proper transitional protection for anyone facing an increase and deferrals for households that are asset-rich but cash-poor.
The exact rate and design should go through proper independent scrutiny. But the prize is real: a fairer system, and the removal of one of the biggest tax penalties on moving home. That could mean lower bills for millions of households and a housing market that actually moves, without giving up the revenue that funds public services.
And Fairer Share is no longer making this case on its own. IPPR, Tax Justice UK and the SMF began from different starting points and have ended up agreeing: the way Britain taxes property has had its day.
The public is there too. More than 100,000 people have now signed the petition to replace Council Tax and Stamp Duty with a Proportional Property Tax. It's time to look at the two together. Email Your MP to add your name.
Council Tax reform: why we should go further than Centre for Cities
By Andrew Dixon, Founder and Chairman of Fairer Share.
Council Tax reform is finally being taken seriously, and with that comes a welcome debate about how best to do it. Anthony Breach at Centre for Cities has made a thoughtful contribution, arguing that Council Tax should become much more proportional while remaining locally controlled.
There is a great deal we agree on. Council Tax is regressive, outdated and still based on property values from 1991. Centre for Cities' own examples illustrate the absurdity: modest homes can face much higher effective tax rates than vastly more valuable properties, both within individual towns and across the country.
We also agree on the fundamental principle that what people pay should bear a much closer relationship to what their property is actually worth. Where we differ is over how to achieve it.
A fairer Council Tax... but still Council Tax
Centre for Cities proposes giving councils much greater freedom to vary rates between Council Tax bands. This would allow individual authorities to make their systems considerably more proportional while retaining Council Tax as a locally controlled source of revenue. There are good arguments behind this approach. Centre for Cities wants councils to retain control over an important local tax rather than becoming more dependent on central government, and it wants councils to benefit financially when development and economic growth expand their local tax base. In a country as fiscally centralised as Britain, both are legitimate objectives.
The question is whether Council Tax itself is the right mechanism through which to achieve them. Allowing councils to vary rates between bands could undoubtedly reduce regressivity within individual local authority areas. But if each authority is expected to raise broadly the same amount it does today, the enormous differences in property values and tax bases between different parts of England remain embedded in the system. That risks replacing one inconsistent system with hundreds of somewhat fairer, but still inconsistent, ones.
Fairer Share starts from a different principle: the tax a household pays should reflect the value of its property, while the funding a council receives should reflect the needs of the community it serves. We don't believe those two questions have to be answered by the same mechanism.
Local government finance is a separate question
Centre for Cities understandably wants councils to have secure revenues and stronger incentives to encourage economic growth. We agree. But neither objective requires two similarly valued homes to face substantially different property tax rates simply because they happen to sit on opposite sides of a council boundary. Government already redistributes resources between local authorities because councils have vastly different tax bases and spending needs. A national Proportional Property Tax could establish a consistent relationship between property value and tax liability, while a fair funding formula determines how revenues are distributed.
That is arguably more transparent than asking Council Tax simultaneously to be a fair household tax, a mechanism for funding local services, an equalisation system and an instrument of fiscal devolution.
Why stop at bands?
There is another fundamental question. If we agree that property taxation should become proportional, why retain the band structure at all? Bands are ultimately a crude substitute for taxing actual property values. Two houses with significantly different values can sit within the same band and pay identical Council Tax, while properties either side of a band boundary can face different bills despite being worth almost the same amount.
Fairer Share's proposal removes those arbitrary steps. Under a genuinely proportional system, if one property is worth 10% more than another, its underlying tax liability is 10% higher. Regular mass appraisal would also prevent the system becoming hopelessly outdated again. The lesson of the past 35 years is that if governments postpone revaluation for long enough, the political difficulty of eventually doing it becomes greater and greater.
And then there is Stamp Duty
This is perhaps the biggest difference between the two approaches. Centre for Cities is principally trying to repair Council Tax. Fairer Share is trying to reform the taxation of residential property as a whole. Stamp Duty doesn't simply raise revenue; it taxes people for moving. It penalises a growing family needing more space, an older household wanting to downsize and someone moving across the country for a better job. It gums up housing chains, reduces mobility and discourages more efficient use of the homes we already have.
That is why Fairer Share proposes replacing Council Tax and residential Stamp Duty together with a single annual Proportional Property Tax based on current property values. Rather than taxing people heavily when they move and then charging an annual tax bearing little relationship to the value of their home, we would spread the burden more fairly across property ownership. More than three-quarters of households would pay less, with an average saving of around £550 a year, while transitional protections would prevent households facing sudden unaffordable increases.
Interestingly, Centre for Cities itself acknowledges that there is potentially a case for replacing Stamp Duty as part of reform. We think that opportunity should be seized.
Devolution and property tax reform can coexist
None of this requires abandoning the case for greater devolution. Councils and mayors can be given substantially greater fiscal autonomy without requiring households in similarly valuable homes to face fundamentally different property tax rates. Indeed, there is a much wider debate to be had about which taxes and revenues should be devolved to local government. Our argument is simply that an outdated and highly regressive Council Tax is a poor foundation on which to build that greater autonomy.
Nor should reform mean imposing sudden increases on households. Fairer Share proposes transitional protections, including a cap on annual increases for primary residences and deferral for people who are asset-rich but income-poor. Fundamental reform can be both ambitious and carefully managed.
An opportunity to go further
Centre for Cities' proposals would improve the existing system. Greater proportionality would be considerably fairer than the Council Tax we have today, and its emphasis on strengthening local government deserves serious consideration. Our argument is that, having finally opened the door to fundamental property tax reform, we shouldn't stop halfway through it.
Rather than redesigning the rates within Council Tax while retaining bands and Stamp Duty, we have an opportunity to replace both taxes with a single proportional charge based on current property values, protect households through the transition and ensure councils are properly funded through a transparent funding formula. There is now considerable common ground that the status quo cannot continue. The remaining question is how ambitious we are prepared to be in replacing it.
Centre for Cities has produced a serious proposal for making Council Tax fairer. Fairer Share believes this is the opportunity to replace it altogether and scrap Stamp Duty at the same time.
If you agree, you can help. Email your MP to ask them to back a fairer system, at fairershare.org.uk/email-your-mp
Britain’s property taxes send all the wrong signals - The Proportional Property Tax can fix that
Tim Harford is right that taxes are about more than raising revenue. They shape behaviour. When it comes to housing, Britain has designed a tax system that encourages precisely the wrong behaviour.
In a recent Financial Times column, Tim Harford examines new research comparing behavioural “nudges” with more traditional policies such as taxes. His conclusion is an important one. Nudges can be effective, but when governments want to change behaviour at scale, getting the underlying financial incentives right can have a much greater impact. As Harford puts it, politicians shouldn't become so preoccupied with the icing that they forget to bake the cake.
Britain's housing market is a striking example. Successive governments have worried about older people remaining in homes larger than they need, younger families struggling to find suitable properties and workers finding it difficult to move to where the jobs are. Yet our tax system actively discourages people from moving.
We tax people for moving
Stamp Duty is effectively a tax on mobility. An older couple wanting to downsize, a growing family needing another bedroom or someone moving across the country for a new job can all face a substantial tax bill simply for changing homes.
At the same time, Council Tax is based on property valuations from 1991 and bears only a loose relationship to what homes are worth today. People living in modest homes in some parts of England can pay a far higher proportion of their property's value than owners of multimillion-pound homes elsewhere.
Put the two taxes together and we have created a peculiar set of incentives. We tax people every year through an outdated and highly regressive Council Tax system — and then impose another substantial tax if they decide to move. Then we wonder why the housing market doesn't work properly.
Change the incentives
Fairer Share proposes replacing both Council Tax and residential Stamp Duty with a simple Proportional Property Tax based on current property values. The fairness argument for doing so is compelling. But there is an equally important economic argument.
PPT would change the incentives within the housing market. Most importantly, Stamp Duty would disappear. People would no longer face a potentially five-figure tax bill simply because they wanted to move home.
Older homeowners would face one fewer barrier to downsizing. Growing families could trade up more easily. People could move more readily for work. And homes could move towards the people who value and need them most.
Every additional transaction can also unlock another transaction further down the housing chain. This isn't merely property-tax reform. It is housing-market reform.
The icing and the cake
Governments can devise schemes to encourage downsizing. They can build more retirement housing, provide better information or introduce targeted incentives. Many of these policies have merit.
But if the tax system continues to impose a large financial penalty on moving, government is simultaneously pressing the accelerator and the brake.
To borrow Harford's analogy, those interventions are the icing. Getting the underlying tax incentives right is the cake.
Britain doesn't simply need to build more homes. We also need to make better use of the millions of homes we already have. Tax reform cannot solve the housing crisis on its own. We need more building, better planning and the right types of homes in the places people want to live.
But alongside increasing supply, government should remove artificial barriers preventing the existing housing stock from being used more efficiently. Stamp Duty is one of the biggest.
Reform without instability
Politicians understandably worry about changing property taxation. Homes are people's largest assets and sudden changes risk disrupting an already fragile housing market.
But that is an argument for careful transition, not for preserving a broken system indefinitely. Fairer Share proposes limiting annual increases for owner-occupied primary residences to £1,200, alongside a deferral scheme protecting those who are asset-rich but cash-poor. Reform can therefore be gradual and predictable.
And abolishing Stamp Duty is central to the proposition. This isn't about simply replacing one property tax with another. It is about designing a system that is both fairer and less economically damaging.
That is why the sensible next step for the Government is an independent review of Council Tax and Stamp Duty, examining not only who pays what, but how these taxes affect mobility, downsizing, employment and the efficient use of Britain's housing stock.
Too often the tax debate becomes an argument about whether taxes should be higher or lower. There is a better question: are we taxing the right things in the right way?
Britain's property-tax system fails that test. Council Tax is based on values that are 35 years out of date. Stamp Duty penalises people for moving. The Government has an opportunity to change that. Stop taxing people for moving. Tax property fairly instead.
Scrap Stamp Duty and Get Britain Moving Again
Andrew Dixon, for Fairer Share:
Britain has a housing mobility problem. Millions of people are living in homes that no longer suit their needs, while others cannot find the homes they need at all. Young families struggle to upsize. Older homeowners are discouraged from downsizing. Workers face a large tax penalty if they move for a better job. One of the clearest reasons is Stamp Duty.
Why Stamp Duty gums up the housing market
Stamp Duty is not just unpopular. It is economically damaging. It taxes movement. It penalises people for changing jobs, having children, separating, retiring, downsizing, upsizing or moving closer to family. In a country with a serious housing shortage, it makes no sense to punish people for using the existing housing stock more efficiently.
The problem was made worse in the 2010s, when George Osborne increased the top ordinary residential Stamp Duty rate from 4% to 12%. A tax that already discouraged movement became a serious brake on downsizing, upsizing and relocating — exactly the opposite of what a healthy housing market needs.
HMRC’s UK property transaction statistics cover residential transactions liable for SDLT in England and Northern Ireland, LBTT in Scotland and LTT in Wales, and are updated monthly. The long-term picture is striking: before the financial crisis, annual UK residential transactions were often around 1.6m to 1.8m. Since then, the market has rarely returned to anything like that level.
Source: Gov.uk
Of course, Stamp Duty is not the only factor. Interest rates, mortgage availability, house prices, planning restrictions and wider economic conditions all matter. HMRC itself notes that transactions fell sharply after the financial crisis, and that recent peaks and troughs have often been driven by tax deadlines, including temporary nil-rate bands and SDLT threshold changes.
That is exactly the point. A healthy housing market should not lurch around because buyers are racing to beat a tax deadline. Nor should people face bills of tens of thousands of pounds simply because they want to move home.
Speaking to Mortgage Introducer, Sebastian Murphy, Group Director at JLM Mortgage Network said "It's a massive own goal. Burnham had the opportunity to do really well on this and he hasn't."
A cross-party consensus
The case for scrapping Stamp Duty is supported by economists and think tanks across the political spectrum. The Institute for Fiscal Studies has described Stamp Duty as an “economic nonsense” and the Mirrlees Review recommended replacing Council Tax and Stamp Duty on housing with a tax proportional to current property values.
The Institute of Economic Affairs has called abolishing Stamp Duty “the single best tax reform any government could make”, while the Centre for Policy Studies has described it as a tax on mobility and aspiration.
Onward, the centre-right think tank, has argued that abolishing Stamp Duty on primary homes would remove the transaction costs that stop people moving and make housing “much more likely to be allocated efficiently”. Its modelling suggested abolition could increase sales of homes worth £250,001 to £925,000 by around 22.5%.
This is not a left-wing or right-wing argument. It is a mainstream economic argument: Stamp Duty discourages moving, downsizing, upsizing and relocating for work. It makes the housing market less efficient and leaves Britain’s existing homes badly used.
The cost to families and downsizers
For someone buying a primary home, Stamp Duty is often a large upfront cost at precisely the moment when they are already stretching their finances. A family moving for more space may need a larger deposit, higher mortgage payments, moving costs, legal fees, furnishing costs and school or commuting changes. Stamp Duty adds another barrier.
For older homeowners, the effect is just as damaging. Many empty nesters would consider moving to a smaller, more manageable home if the costs were lower. That could release equity for retirement, reduce running costs, and free up larger homes for families. But Stamp Duty makes downsizing less attractive. It asks people to pay a large tax bill for doing something that would often benefit both them and the wider housing market.
What would scrapping Stamp Duty achieve?
Scrapping Stamp Duty on primary homes would therefore support three important goals.
First, it would improve housing mobility. People should be able to move when their circumstances change. A tax system should not trap them in homes that are too large, too small, too expensive to run, too far from work or no longer suitable.
Second, it would support economic growth. Removing one of the biggest transaction costs in the housing market would help people move for work, allow families to live in more suitable homes, and make better use of the housing stock we already have. Fairer Share’s own updated modelling describes abolishing Stamp Duty on owner-occupied homes as a key part of reform because it removes one of the most distortive taxes in the UK economy and supports labour-market flexibility and productivity.
Third, it would make the tax system fairer. Stamp Duty does not tax housing wealth consistently. It taxes only those who move. Two households can own homes of similar value, but the one that needs to move for work, family or health reasons faces a large additional tax bill while the other does not. That is arbitrary.
"Any future reform should improve housing mobility, protect first-time buyers and ordinary homeowners, but avoid creating new cliff edges or regional unfairness," said Sam Kirtikar , CEO of The Mortgage Broker, in Mortgage Introducer.
Fairer Share believes Stamp Duty on primary homes should be scrapped alongside Council Tax and replaced with a Proportional Property Tax based on current property values. This matters because abolishing Stamp Duty cannot be considered in isolation. The revenue has to be replaced, local services need to be properly funded, and the system must be fair both to existing homeowners and future buyers.
Why a Proportional Property Tax?
A Proportional Property Tax would do that more sensibly. Instead of charging people tens of thousands of pounds at the point of moving, it would replace Council Tax and Stamp Duty with a fairer annual charge based on current property values. Existing homeowners would be protected through transition, including a cap on annual increases and deferral for those who cannot afford to pay from income.
Crucially, this is not about giving a tax cut to second-home owners or property investors. Fairer Share supports surcharges for second homes, empty homes and foreign-owned homes, so that reform helps primary-home owners and local communities rather than fuelling speculation.
The current system is indefensible. Council Tax is still based on 1991 property values. Stamp Duty punishes people for moving. Together, they distort the housing market, penalise ordinary life choices and hold back growth.
If a government proposed this system from scratch today, nobody would design it this way. The sensible reform is clear: scrap Stamp Duty on primary homes, abolish outdated Council Tax, and replace both with a fairer, simpler property tax that gets Britain moving again.
The Sensible Next Step on Council Tax: An Independent Review
Fairer Share’s response to reports on Andy Burnham’s position
Fairer Share welcomes Andy Burnham’s recognition that Council Tax is unfair. He is right that there are people in low and middle income areas who are paying higher Council Tax bills than owners of far more valuable homes in wealthier areas of the country. That is exactly why reform is needed.
This was never about forcing an overnight change into the next Budget. Fairer Share have been campaigning on this for years, and in that time we have developed the fairest, most sensible and ready-to-implement solution to the property tax crisis which is fully scoped, costed, and backed by leading economists and politicians.
Replacing Council Tax and Stamp Duty requires detailed work on transition, valuations, local government finance, renters, pensioners and regional impacts. But the fact that reform is complex is not an argument for leaving a broken, unfair system untouched.
Council Tax is still based on 1991 property values. In many northern and Midlands communities, households in modest homes pay more each year than owners of multimillion-pound properties in Westminster. That is indefensible.
Fairer Share’s proposal would abolish Council Tax and Stamp Duty and replace them with a Proportional Property Tax based on current values. It would cut bills for 18 million of households, remove a major barrier to moving home, shift liability from tenants to property owners, and include transition protections so existing homeowners are not hit with sudden increases that add to the Council Tax arrears crisis the UK is currently in.
Any increase for an existing homeowner’s primary residence would be capped at £1,200 a year until sale, with deferral available for those who cannot afford to pay from income. Second homes would face a surcharge, helping communities where local families are priced out by holiday homes and underused properties.
The choice is not between rushing reform and doing nothing. The sensible next step is a full independent review of Council Tax and Stamp Duty, so ministers can properly assess how to replace two outdated, unfair and economically damaging taxes with something fairer.
If Andy Burnham believes the current system is unfair, as he has said, then the answer should be to examine serious reform — not allow Treasury caution to shut the debate down before it has even begun.
‘To win support in places like Makerfield we need to abolish Council Tax’ - Fairer Share in Labour List
Afzal Khan MP has written for LabourList on the injustice of a tax system where families in modest terraces in some areas pay a higher effective property tax rate than those living in multimillion-pound mansions in London and beyond.
Read the full article:
‘To win support in places like Makerfield we need to abolish Council Tax’
You don’t need me to tell you that the results of the local elections were tough for Labour this year. We lost a great number of hardworking Labour councillors and control of many councils – , to both the right and the left – through no fault of those local Labour groups.
Facing up to an unprecedented challenge from both sides and loss of trust among many voters who supported us in 2024 requires bold ideas, a new strategy, and an agenda that unmistakably puts hard working people first.
We can do that while being proud of our record in office up until now. Labour has grown the economy and started to turn our public finances around. We have increased rights for working people and for renters, cut NHS waiting times, and increased defence spending.
But we cannot ever stop being a party with justice at its heart, and we lost voters trust by choosing to try to raise money in an unfair way, without fixing the broken unjust system we have first.
Across Makerfield, Greater Manchester and many of our Labour heartlands there is a huge injustice in the tax system that sees hardworking people in poor areas paying more tax than those in some of the most prosperous in the country, an issue rightly raised by Andy Burnham on the campaign trail. People have seen their councils severely cut back since the Coalition government but are paying more, not just on council tax, but since the beginning of the Iran War, on energy and the weekly shop too.
What’s even worse is that, thanks to Council Tax bands being based on 1991 prices, voters in poorer areas pay a substantially larger proportion of the value of their home on council tax than those living in mansions in Westminster.
When voters see a family in a modest terrace paying a higher effective property tax rate than the owner of a multimillion-pound London mansion, they conclude the system is rigged. If Labour does not address this injustice, others will exploit it.
We are already taking action to begin to address this. In the last budget Labour announced a consultation on the High Value Council Tax Surcharge, or ‘mansion tax’, which kicked off last month. This involves reevaluating the most valuable homes and introducing new tax rates to ensure some of the wealthiest people pay a fairer share, a policy which gives us a strong base to build on. But we need to go further to address the inequality at the other end of the council tax system.
Labour needs to reach for bold solutions to address the core problems society faces, and all parts of the Labour movement should be taking note.
By abolishing Council Tax and Stamp Duty and replacing them with a progressive property tax (PPT), we can end this inequality, putting hundreds of pounds back into the pockets of voters. According to data from the Fairer Share campaign for a PPT, in my constituency of Manchester Rusholme the average household would save £500, with 92% of households benefitting. In Makerfield, the average saving is also £500 but that percentage of households benefitting rises to 98%. In many constituencies across our heartlands we have lost the trust of, these figures are even higher.
Become a friend of LabourList and join our community. Our friends support our vital non-factional work and get access to exclusive content and events.
What’s more, according to polling (also from Fairer Share), the policy is popular across the political spectrum of voters we need to win back. When asked whether they would support the notion that property taxes should be based on the current market value of each property, 75% of Labour voters, 62% of Reform voters, and 72% of Green voters strongly or somewhat agree.
In a country where we feel more divided than ever before, and where Labour is being pincered by the Greens and Reform UK, there are very few issues which unite voters as much as this. By doing this, we can carve out a platform that wins over voters and stay true to our values at the same time.
Of course, for some properties, the change would mean property taxes could go up. However, this can be mitigated through proposals such as capping the tax increases each year, deferral of payments, and targeted support. But notably, MRP polling indicates that areas that benefit less still support the measure, with every constituency net in favour. This is not about raising taxes overall, but making the burden fall in a fairer way. It is right that Labour lead the debate from the front.
As the party rebuilds after the local elections and comes together to get Andy Burnham elected in Makerfield, we need to refocus on issues of economic justice and show voters we are fighting for them in order to win back their trust. Burnham is right to make council tax a centrepiece of his campaign, and we need more bold thinking if Labour are to win again in 2029.
People in places like Makerfield are not asking for special treatment. They are asking for fair treatment.
A Proportional Property Tax Is Fairer Than a Local Income Tax
Council Tax is clearly broken. It is based on property valuations from 1991, bears little relationship to people's ability to pay, and leaves many households in modest homes paying a higher effective tax rate than those living in properties worth millions. Meanwhile, councils face growing pressures on social care, housing and local services.
Given those problems, it is easy to see why some argue that local government should instead be funded through a local income tax. Income is often viewed as a fairer measure of ability to pay than property ownership, and a local income tax would undoubtedly be more progressive than the current Council Tax system.
But while the diagnosis is correct, the prescription is wrong.
The real problem is not that income is undertaxed. It is that property wealth is taxed badly.
Income Is Already Heavily Taxed
Before creating a new local income tax, we should recognise that income is already one of the most heavily taxed parts of the British economy.
Workers pay Income Tax and National Insurance. They then pay VAT on much of what they spend from their post-tax earnings. For many households, a substantial proportion of every additional pound earned is already taken in tax.
Property is different. Council Tax bears little relation to the actual value of homes, particularly at the top end of the market. As a result, many owners of high-value properties pay remarkably low effective rates compared to those in more modest homes.
If the goal is a fairer tax system, it makes more sense to reform the undertaxed base than to add another layer of taxation to one that is already heavily taxed.
Tax Wealth More Fairly, Not Work More Heavily
A local income tax would leave many of the biggest distortions in the housing market untouched.
Someone living in a £2 million house could pay relatively little local tax if their current income is modest. Meanwhile, a teacher, nurse or small business owner in an average home could face a significantly larger tax bill because they happen to be earning a decent salary.
That shifts the burden further onto work while doing little to address the unequal taxation of housing wealth.
There is also an important intergenerational dimension.
Younger working households already bear much of the tax burden through Income Tax and National Insurance, often while facing high housing costs and struggling to get onto the property ladder. Many have seen little benefit from the decades of house price growth that transformed the wealth of existing homeowners.
By contrast, many older households have benefited from years of falling interest rates and substantial increases in property values. Under a local income tax, a retired couple living in a high-value home could pay relatively little local tax if their taxable income is modest, despite sitting on significant housing wealth.
That would risk shifting more of the burden onto younger workers while leaving some of the largest concentrations of wealth largely untouched.
A proportional property tax is fairer because it recognises that housing wealth, not just annual income, reflects a household's ability to contribute. It therefore spreads the burden more evenly across generations rather than concentrating it on those currently in work.
Fairer Share's proposal to replace Council Tax and Stamp Duty with a Proportional Property Tax (PPT) takes a different approach. It links tax directly to the value of a property, ensuring that owners of the most valuable homes contribute proportionately more while many households in modest properties pay less.
Better for Local Government
Property is also a stronger basis for local taxation.
Unlike income, property cannot move. Property values are shaped by local services, infrastructure, schools, transport links and planning decisions. When councils help create thriving communities, rising property values reflect that success.
A proportional property tax therefore creates a stronger connection between local public investment and local tax revenues.
It is also a more stable source of funding. Income tax revenues can fall sharply during economic downturns as employment and earnings weaken. Property taxes tend to be more predictable, giving councils greater certainty when planning services and investment.
Don't Forget Stamp Duty
The biggest advantage of the Fairer Share proposal is that it reforms both Council Tax and Stamp Duty together.
Stamp Duty is one of the most economically damaging taxes in Britain. It discourages people from moving, traps older households in homes that are too large, makes it harder for families to find suitable housing, and reduces labour mobility.
Abolishing Stamp Duty would make the housing market work better for everyone.
Many low- and middle-income households would benefit not only from lower annual property taxes, but also from being able to move home without facing a large tax bill.
A local income tax offers none of these benefits.
The Better Reform
Those who support a local income tax are right about one thing: the current system is broken.
But replacing Council Tax with a new tax on earnings would mean asking working people to carry even more of the burden through their pay packets, despite income already being heavily taxed. It would also risk shifting the balance further against younger generations who earn their income through work while leaving substantial housing wealth comparatively lightly taxed.
A better solution is to reform the taxation of property itself.
Replacing Council Tax and Stamp Duty with a Proportional Property Tax would create a fairer system, provide a more stable funding base for local government, reduce barriers to moving home, and cut bills for many low- and middle-income households.
If the choice is between taxing work more heavily and taxing property wealth more fairly, Labour should choose the latter.
Join the growing momentum for change and sign the petition calling for a full and independent review of property tax.
Londoners should back Andy Burnham’s property tax reforms - not fear them - Fairer Share in City AM
Fairer Share founder Andrew Dixon has written for City AM on why a Proportional Property Tax would make London's housing market work better by scrapping Stamp Duty, fixing decades-out-of-date Council Tax bands, and ensuring the most valuable homes contribute their fair share.
Read the full article here:
Replacing Stamp Duty and council tax with a proportional property tax will make London’s housing market work better, says Andrew Dixon
If a “London tax grab” were on the cards, Londoners would rightly be wary. They already face high rents, high mortgages and some of the largest tax bills in the country.
Yet Fairer Share’s Proportional Property Tax (PPT) proposal is anything but. Far from that crude label – used by Charles Amos in a recent column – it is a long-overdue change Londoners should me.
A PPT would replace broken Stamp Duty and Council Tax with one fairer annual tax, based on current property values.
Scrapping Stamp Duty is among the most pro-London reforms imaginable. It penalises and discourages young people from getting on the ladder, growing families securing space they need, and older people downsizing. It hits London especially hard – a £5.1 bn annual penalty for moving, gumming up the market. That amounts to over a third of the Exchequer’s Stamp Duty receipts across the whole of England and Northern Ireland. That is a huge burden on one city, falling directly on people simply trying to find the homes they need.
Council Tax is just as indefensible, with decades-old tax bands that pretend house prices haven’t changed since 1991. London’s market has morphed beyond recognition since. Uneven price growth and council priorities have created absurd tax inequalities, across not just Britain but across London itself. Peckham’s teachers and nurses can pay more than oligarchs in far pricier homes in Westminster.
A switch not a grab
Fairer Share’s plan is therefore a tax switch, not a tax grab. Nor would change happen overnight for homes benefiting from current inequalities, with a cap on annual increases until owners sell. The new buyer, who’ll save significantly from stamp duty’s abolition, will then pay the fair proportionate rate. Meanwhile cash-poor homeowners could defer payment, ensuring no-one is forced to sell.
London’s many renters, struggling with high housing costs, would benefit significantly, too. Liability would shift to homeowners, stopping renters paying taxes on properties that aren’t theirs. A PPT would ask more of those who clearly should contribute more – with a higher surcharge on under-used and investment properties – namely overseas owned, empty and second homes.
There is another London-specific fairness point: land value capture. Public investment and decision-making has fuelled much of London’s property wealth, creating enormous private gains. Transport upgrades, schools, hospitals, public realm improvements and planning decisions all lift nearby land and property values. The Elizabeth line alone was partly funded through London business rates. Studies show property values rose significantly along Crossrail’s route. So the public deserve a modest share of such unearned wealth to fund public services.
More broadly, London needs a housing market that works. Critics present the choice as reform versus no-need-for-reform. That is patently false – the status quo is totally outdated, inefficient and unfair. Londoners are already living with the consequences of a broken system: punitive Stamp Duty, outdated Council Tax, unfair bills between boroughs, and a housing market that traps too many people in the wrong homes.
The real choice is whether we keep two bad taxes, or replace them carefully with one fairer system
The real choice is whether we keep two bad taxes, or replace them carefully with one fairer system. With momentum growing, Andy Burnham – who has long supported council tax and stamp duty reform – should seize the initiative and reform this broken system once and for all when he walks through the door of No. 10.
Change is not anti-London, but pro-London. Done properly, with caps, deferrals, and the abolition of Stamp Duty, many in the capital, not just the north would thank him for it. Far from a London tax grab. this is a long-overdue reform London should help lead.
Fairer Share in The i Paper: Burnham Wins Backing to Scrap Council Tax
We welcome growing political support for urgent reform of Council Tax, following coverage in The I Newspaper highlighting Andy Burnham’s backing for a fairer property tax system thanks to our work.
The article also included supportive comments from Jonathan Hinder MP and Jonathan Brash MP, adding further weight to our calls for a fairer, more modern property tax system.
Council Tax is still based on property values from 1991, leaving households across the country paying unfair and outdates rates. Sign our petition calling for an independent review of Council Tax and Stamp Duty, and for a move towards a fairer, simpler property tax that better reflects today’s housing market.
You can read the full press release below.
Six Labour MPs have today backed Andy Burnham’s call for property tax reform, as new analysis from campaign group Fairer Share reveals Makerfield constituents pay twice the council tax of Westminster residents in similar properties.
The frontrunner to replace Keir Starmer said he wanted “reform of council tax” at his by-election campaign launch, calling the current system “highly regressive” and its 1991-based valuations “not justifiable”. He has previously highlighted how the status quo benefits wealthier home-owners over lower-income families, noting: “You can be paying much more council tax in a Band D house in Greater Manchester than in some of the very wealthiest parts of London.”
One Labour MP called council tax "an idea whose time has come”, while another said a proportional tax would tackle rising household bills more than the “tinkering” with council tax that government began consulting on last week. The six MPs are Jonathan Hinder, Patrick Hurley, Chris Webb, Ian Byrne, Jonathan Brash and Afzal Khan.
Analysis by Fairer Share, the national campaign advocating for a Proportional Property Tax to replace both council tax and stamp duty, shows a standard Band D property in Makerfield faces a council tax bill of £2,152 this year. This is more than double the levy on residents in a Band D property in Westminster, who pay just £1,048. Households living in £280,000 homes in Makerfield pay more Council Tax than owners of £10 million properties in Westminster. The effective property tax rate on the Makerfield home is around 0.75%, compared with just 0.02% for the Westminster mansion.
Fairer Share research also shows the average Makerfield household would save £500 a year under a Proportional Property Tax, a uniform annual levy based on a percentage of property’s value. Over 98% of households in the Greater Manchester constituency would be better off. Meanwhile an MRP poll carried out in 2022 by JL Partners showed residents of Makerfield overwhelmingly supporting a Proportional Property Tax (59% in favour versus just 8% opposed).
Jonathan Hinder, Labour MP for Pendle and Clitheroe, said:
“A Proportional Property Tax would reaffirm to ordinary people that Labour's on their side, putting pounds in their pockets without costing government a penny. Stamp duty and council tax are unpopular and broken, and there’s a credible alternative ready to go. A PPT could redistribute to lower-income and ordinary families within Labour’s fiscal rules. It’s an idea whose time has come.”
Patrick Hurley, the Labour MP for Southport, said:
“People in Southport know the council tax system is unfair because they feel it in their pockets every year. Figures from Fairer Share show we’re paying around a third more than the national average when you look at it as a share of property value. That just isn’t right. Families here work hard and shouldn’t be asked to shoulder a bigger burden than wealthier parts of the country.”
Chris Webb, Labour MP for Blackpool South, said:
“The Chancellor rightly highlighted at the Budget how properties in Blackpool pay £300 more council tax than £10 million mansions in Mayfair, exposing a system that entrenches unfairness and deepens inequality. The government’s current proposal of a surcharge on £2 million homes is a start, but we need to go further.
“With consultation underway, and voters clearly demanding action that puts our residents first, we should be far bolder and move faster to deliver real fairness. A system this flawed doesn’t need tinkering, it needs transforming. A proportional property tax would be a fairer system that eases pressure on households who are being squeezed by rising living costs, especially at a time when global instability is driving bills higher and stronger action on the cost of living is needed more than ever.”
Ian Byrne, Labour MP for Liverpool West Derby, said:
“Andy is right council tax is regressive and needs reform. My constituents pay a higher rate than some of the richest people in the UK thanks to an outdated and broken system. We could announce a comprehensive review of the property tax system, to put money in people’s pockets, end this inequality and deliver the change communities are crying out for."
Jonathan Brash, MP for Hartlepool and chair of the council tax reform APPG, said:
“Council tax is broken. It is a poverty tax that hits working people hardest while the wealthy get away lightly. Hartlepool, like Makerfield, shows just how rotten this system has become. Families in ordinary two-bedroom homes are paying more than people living in million-pound mansions in Westminster. That is not fair. It is a national scandal.
“The APPG has heard time and again how this outdated system punishes people who are already struggling to get by. Enough is enough. We need to scrap council tax and replace it with a fair system that works for every community in the country.”
Afzal Khan, Labour MP for Manchester Rusholme, said:
"Andy is right - the council tax system is outdated and disproportionately burdens those who pay outside of London and the South East. Replacing council tax, stamp duty and bedroom tax with a much fairer proportional property tax would make over 18 million households better off. This includes over 90% of households in my constituency, who’d save an average of £500."
Andrew Dixon, Chair of the Fairer Share campaign group said:
“Andy Burnham has struck a chord. Replacing Council Tax and Stamp Duty with a Proportional Property Tax is hugely popular in Makerfield. It would benefit the vast majority of households in the constituency, and address one of the core inequalities and injustices at the heart of our tax system. It’s an idea whose time has come with government consulting on council tax reform and the Iran crisis pushing up energy and food bills.
“The Greater Manchester mayor has said we can ‘come up with a proposal where Left meets Right on this’ - a PPT is that proposal, with support spanning not only the Labour benches but the Tory chairman too.
“The UK already has the highest property taxes in the OECD. Replacing an outdated and inherently regressive council tax system will create a fairer system that doesn’t need to increase the overall tax burden. Meanwhile replacing stamp duty would improve labour mobility, support downsizing and help households move to homes that better suit their needs.”
Last October 13 Labour MPs – led by Jonathan Brash, MP for Hartlepool - wrote to the Chancellor urging a full review of property taxation, before think tanks from the IPPR to Onward and the Adam Smith Institute also united in November to condemn council tax and stamp duty. A PPT is said to have been seriously considered at the last Budget, with the Prime Minister’s economic adviser Minouche Shafik a reported supporter.
This month Paul Johnson, former IFS director, endorsed the government petition to review council tax and stamp duty, saying: “Any government serious about both growth and fairness would have this top of their agenda.” Over 27,000 signatories have now signed the petition.
Support for reform is increasingly crossing political boundaries as voters recognise that a tax system based on 1991 property values is no longer sustainable. Britain’s property taxes now raise more revenue than any other OECD country, yet many households continue to face highly regressive outcomes. Council tax arrears have now risen above £8 billion, highlighting growing pressure on households and the need for reform.
NOTES:
Fairer Share research also shows even residents of the lowest-value homes in Makerfield face twice the bills of their Westminster counterparts, with Wigan Council charging Band A properties (the most common locally) £1,435. Westminster charges just £699.
More information on how a PPT would work can be found on Fairer Share’s website.
In Liverpool West Derby, constituency of Ian Byrne quoted above, Fairer Share data finds the average household would save £750 from a PPT, with 99% of households better off. In the constituency, the public back the measure by 58% to 5% opposed.
In Pendle and Clitheroe, constituency of Jonathan Hinder quoted above, Fairer Share data finds the average household would save £800 from a PPT, with 99% of households better off. In the constituency, the public back the measure by 59% to 8% opposed.
In Blackpool South, constituency of Chris Webb quoted above, Fairer Share data finds the average household would save £750 from a PPT, with 100% of households better off. In the constituency, the public back the measure by 57% to 7% opposed.