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.
10,000 Signatures In - Government Defends the Indefensible on Property Tax
Now that our petition calling for a full, independent review of property taxation has surpassed 10,000 signatures, the Government has issued its formal response. While it concedes that the current system has shortcomings, it ultimately falls back on defending a status quo that is becoming ever harder to justify in the face of mounting evidence and public concern.
Here's why:
-
An outdated system cannot deliver fair outcomes
Council Tax may be stable and widely understood, but it is still based on property values from 1991. Over three decades of house price divergence mean that liabilities no longer reflect real property wealth or ability to pay. As a result, the system is regressive in practice, with households in lower-value areas paying a higher effective tax rate than those in far more expensive properties. For example, a modest home in Hartlepool can face a higher proportional burden than a high-value property in Westminster.
The Government suggests that banding remains a practical necessity. However, regular, up-to-date property valuations are standard practice across many comparable countries. With modern datasets, automated valuation models, and AI-driven techniques, frequent and accurate revaluation is now both technically and administratively feasible. The continued reliance on 1991 values is therefore a policy choice, not a constraint.
-
A system under strain: rising debt and fiscal pressure
The sustainability of the current system is increasingly in question.
- Council Tax arrears in England are estimated at over £6 billion annually, with total outstanding debt exceeding £8 billion
- At the same time, numerous local authorities face acute financial pressure, with multiple councils issuing effective bankruptcy notices in recent years
This reflects a system under strain on both sides:
- Households struggling to meet liabilities that do not reflect current values.
- Councils reliant on a tax base that is both politically constrained and economically outdated.
A fairer, more proportionate system would improve compliance, reduce arrears, and provide a more sustainable funding base.
-
Reliefs and discounts: arbitrary and symptomatic
The Government highlights the scale of reliefs and discounts as evidence of fairness. In reality, their breadth reflects systemic weakness. This is because:
- Reliefs are often arbitrary in structure, inconsistently applied, and only loosely linked to property value.
- They introduce complexity and administrative burden.
- They treat symptoms rather than addressing the underlying misalignment in tax design
A system that requires millions of households to be retrofitted into fairness is not functioning as intended.
-
The Government’s High Value Council Tax Surcharge: proof reform is possible
The proposed High Value Council Tax Surcharge contains several constructive elements:
- A more progressive approach to high-value properties
- The use of updated valuations
- Consideration of deferral mechanisms for asset-rich but cash-poor households
These are precisely the principles that have been consistently advocated in broader reform proposals. Their inclusion demonstrates that modernisation is both feasible and politically deliverable. However, as currently designed, the surcharge remains a partial measure layered onto an outdated system, rather than a comprehensive solution. It shows reform can be done but stops short of doing it fully.
-
Stamp Duty: a drag on mobility and growth
The Government emphasises Stamp Duty’s administrative efficiency and progressivity. This overlooks its core flaw: it is a tax on moving home.
- It discourages downsizing and upsizing
- It reduces labour mobility
- It suppresses housing transactions and market efficiency
These distortions are particularly problematic given the Government’s ambition to deliver 1.5 million new homes, a target that remains significantly off track. A tax system that inhibits transactions risks compounding housing supply challenges rather than supporting them.
-
The benefits of comprehensive reform for households
A more proportionate, modernised property tax system, such as that proposed by us, would deliver clear benefits:
- Fairer bills, more closely aligned to current property values
- Lower costs for 77% of households, particularly those in lower- and middle-value homes
- Removal of Stamp Duty, making it easier to move home
- Greater transparency and simplicity, reducing reliance on complex reliefs
- Improved economic mobility, allowing households to move according to need rather than tax considerations
In short, reform would not only improve fairness—it would make the housing market work better for ordinary households.
-
Incremental change is no longer sufficient
While the Government states that the system is kept under review, this has been the case for decades without meaningful structural reform. Incremental adjustments have consistently failed to resolve widely acknowledged problems.
The current system is:
- Outdated (based on 30+ year-old values)
- Inequitable (regressive in practice)
- Distortive (penalising mobility and economic efficiency)
Conclusion: The case for a full review
The Government’s response acknowledges many of the issues but stops short of engaging with their logical conclusion. The case for a full, independent, evidence-based review is clear and overdue. This is not about advocating a single predetermined solution. It is about ensuring that the UK’s property tax system is fair, modern and sustainable.
If we are to secure meaningful reform, this issue must be properly debated in Parliament. That will only happen if there is sufficient public support.
A system this important should not be preserved by default. It should be examined, openly and rigorously, in the national interest. If you agree, please support our petition.
Fairer Share welcomes Labour Together report on fixing the “shop front of the state”
We welcome the publication of a new report from the Labour Together, Fixing the shop front of the state, which highlights the growing crisis in local government finance and the urgent need for reform of the UK’s property tax system.
Local government is often described as the “shop front of the state” - the part of government people encounter most directly in their daily lives. From social care to waste collection, planning to libraries, councils provide the services that shape how people experience the state itself.
The report sets out how this shop front is under increasing strain, with councils across the country facing severe financial pressure while council tax bills continue to rise. As the paper argues, the problem is not only about the level of funding, but about the way the system raises money in the first place.
A growing consensus on property tax reform
Fairer Share has long argued that the current system of Council Tax and Stamp Duty is outdated, unfair, and no longer fit for purpose.
Council Tax in England is still based on property values from 1991, and its banded structure means households in lower-value homes often pay a higher share of their income than those living in more expensive properties. Stamp Duty, meanwhile, discourages people from moving home and creates distortions in the housing market.
We therefore welcome the report’s recognition that a Proportional Property Tax offers a fairer and more sustainable alternative.
A system based on up-to-date property values, where everyone pays the same percentage, would be simpler, more transparent, and better able to provide stable funding for local services.
Tax reform should not be delayed
The report discusses property tax reform alongside wider changes to the funding of adult social care and local government finance.
While these issues are closely connected, Fairer Share believes reform of property taxation should stand on its own merits. A fairer system could be introduced to deliver an immediate annual tax cut of £556 on average for 76% of households.
Delaying reform risks prolonging a system that is widely seen as unfair and increasingly difficult to sustain.
Time for a full review
There is now growing agreement across the political spectrum that the current system of Council Tax and Stamp Duty is broken.
The next step must be a full, independent review of property taxation, so that the UK can move to a system that is fairer for households, more stable for local government, and better suited to the modern housing market.
👉 Sign the petition calling for a full independent review of Council Tax and Stamp Duty here.
Three Broken Taxes, One Simple Fix: A Proportional Property Tax for Britain
Fairer Share’s Founder, Andrew Dixon, speaks about why Council Tax, Stamp Duty Land Tax and Inheritance Tax need to be scrapped in favour of a fairer, growth-friendly Proportional Property Tax.
Britain’s tax system is no longer fit for purpose. It is overly complex, economically distortive, and increasingly unfair across generations. Three taxes in particular capture the problem. These are Council Tax, Stamp Duty Land Tax (SDLT), and Inheritance Tax (IHT).
Together, they raise roughly £55 billion a year, yet do so in ways that penalise aspiration, entrench inequality, and hold back economic dynamism.
Replacing them with a single Proportional Property Tax would not just be a reform of property taxation. It would be a fundamental reset of how the UK taxes wealth, mobility, and intergenerational transfers, bringing Britain closer to international best practice.
Start with Council Tax, which raises around £45 billion annually. It is one of the most regressive taxes in the UK. Households in lower-value properties can face effective tax rates several times higher than those in high-value homes, largely because the system is still based on 1991 valuations.
In a country where house prices have diverged dramatically across regions, this is increasingly indefensible. Most advanced economies have long since moved to regular revaluations or proportional systems to avoid precisely these distortions.
Stamp Duty Land Tax raises around £10 billion annually but at significant economic cost. It is a textbook example of a “bad tax”: one that changes behaviour in damaging ways. By taxing transactions rather than ownership, it acts as a direct barrier to moving home.
OECD evidence shows that transaction taxes reduce housing turnover and labour mobility, weakening productivity. The UK’s reliance on SDLT helps explain why people move less often than in comparable economies, locking families into unsuitable homes and constraining access to opportunity.
Inheritance Tax raises just £8 billion a year (that’s less than 1% of total tax revenue) yet generates disproportionate public hostility. It is widely perceived as unfair, not least because it taxes assets built from already-taxed income. In practice, it is also highly avoidable for the wealthiest, while falling more heavily on those without access to complex planning.
At the same time, it fails in its broader purpose: wealth is typically passed on too late to make a meaningful difference. The average inheritance is received at around age 60, decades after it could have helped with housing, education, or starting a business.
Taken together, these taxes are not just unpopular. They are economically counterproductive and increasingly out of step with international evidence.
Across the OECD, recurrent annual taxes based on up-to-date values on property are widely regarded as among the least harmful to growth. They are difficult to avoid, stable, and do not discourage work or mobility.
That is why institutions such as the OECD and IMF have consistently argued for shifting the tax mix away from transactions and towards property-based taxes.
The UK is an outlier. It relies heavily on inefficient transaction taxes, while its main annual property tax is based on valuations from over three decades ago.
A Proportional Property Tax would correct this. Instead of outdated bands, transaction penalties, and end-of-life levies, it would apply a simple annual charge of around 0.5–1% of property value based on current valuations. This could raise similar or greater revenue, while distributing the burden far more fairly.
Crucially, it would allow for the abolition of Council Tax, SDLT and IHT altogether.
Scrapping Council Tax would end a system that penalises people for living in modest homes, replacing it with a fairer model where contributions reflect actual property values, not outdated estimates from 1991.
Removing SDLT would immediately reduce the cost of moving, often by tens of thousands of pounds, unlocking housing transactions and improving labour mobility. International evidence suggests that cutting transaction taxes can increase mobility by double-digit percentages, with clear benefits for productivity and growth.
Replacing IHT with an annual, unavoidable property-based charge would broaden the tax base and reduce avoidance. Property is immovable and visible. Unlike other assets, you cannot hide it offshore, making it one of the most efficient tax bases available. This would reduce reliance on complex tax planning and ensure that contributions are based on real, observable wealth.
For younger generations, the benefits would be transformative. Today’s system imposes high upfront costs, delays wealth transfers, and restricts housing supply. A proportional system would encourage downsizing and more efficient use of housing, freeing up homes for younger families.
It would also support earlier transfers of wealth when they matter most, in people’s 20s and 30s, not their 60s.
There is also a compelling political case. Council Tax, SDLT, and IHT are all deeply unpopular. Few voters would design such a system from scratch. Replacing them with a single, transparent tax would represent a major simplification, reducing administrative costs, increasing transparency, and rebuilding trust.
For political parties, this is a rare opportunity to deliver a triple dividend: stronger growth, greater fairness, and a simpler tax system aligned with global best practice.
Finally, there is a practical reality for households. The future of IHT is uncertain. Frozen thresholds are already pulling more estates into scope, and future governments may tighten the regime further.
Against that backdrop, there is a clear case for passing on assets sooner rather than later, rather than relying on a system that may become more punitive.
The UK does not need incremental tweaks. It needs a fundamental reset. A Proportional Property Tax offers a clear path to a fairer, simpler, and more growth-friendly system.
Sign the petition to call for a full and independent review of the UK’s property tax system.
LBC Interview: Why Council Tax Is Broken, and the Case for a Proportional Property Tax
Fairer Share founder Andrew Dixon joined Matthew Wright on LBC this weekend to unpack why Council Tax is failing households and councils alike, and what real reform could look like.
The conversation explored how decades of cuts to local government funding have left councils struggling to provide essential services, from social care to road maintenance, while households face ever-rising bills. Andrew highlighted how Council Tax, still based on outdated 1991 property values, has become deeply regressive, with lower-value homes often paying a far higher proportion of their value than multi-million-pound properties.
Andrew shared real-world examples of this imbalance, including modest flats paying more in Council Tax than luxury mansions just miles away, underlining why the current system punishes low and middle-income households while failing to provide stable funding for local services.
He also outlined Fairer Share’s proposal to scrap Council Tax and Stamp Duty and replace them with a Proportional Property Tax, paid by owners based on the current value of their homes. Under this model, around 75% of households would see their tax bills fall, with an average saving of £556 per year, while removing Stamp Duty would make it easier for people to move home for work, family, or downsizing.
While acknowledging the scale of the challenge, Andrew pointed to recent moves toward more progressive property taxation as a step in the right direction, and stressed the need for a full, independent review of Council Tax and Stamp Duty to deliver evidence-based reform.
The interview closed with a shared sense of urgency, but also optimism, that with public pressure and political will, the UK can build a fairer system that funds vital services properly and reflects people’s real ability to pay.
✍️ Take action
Fairer Share is calling on the Government to commission a full, independent review of Council Tax and Stamp Duty, so we can move toward a system that’s fair, evidence-based, and fit for today’s housing market.
If you agree that Council Tax is broken and needs fundamental reform, please add your name to our petition and help us build momentum for change.
Every signature strengthens the case for a fairer system that reflects real property values, supports local services, and reduces pressure on households.