The Resolution Foundation's property tax plan: what it means for the case for reform
One of the UK's most respected think tanks has just made the case we've been making for years: Council Tax and Stamp Duty are broken, and a proportional property tax should replace them.
With the Autumn Budget due on 28 October, the timing could hardly be better. The question is no longer whether our property taxes need fixing. It's whether the government will act.
What the Resolution Foundation is proposing
The Resolution Foundation wants Council Tax and Stamp Duty replaced by a single, revenue-neutral tax charged at 0.7% of a home's current value. It would be paid by occupiers, with rebates for poorer households and the option to defer bills until sale for people who are asset-rich but cash-poor.
The diagnosis is blunt. The UK raises more from property taxes than any other OECD country, 3.7% of GDP in 2023 against an average of 2%, but it raises that money badly. Council Tax still rests on 1991 valuations, and Stamp Duty stops people moving to homes and jobs that suit them.
The unfairness shows up in the numbers:
- By 2030-31, the effective annual tax rate on a £100,000 home will be almost three times that on a £1 million home.
- 61% of households in England will be overpaying by an average of £430 a year compared with a proportional tax.
- In the North East, 85% of households lose out from the current system, by an average of £710 a year.
- London underpaid £3.1 billion in property tax in 2024-25, relative to the value of its homes.
- Almost two-thirds of households below the 80th income percentile lose out, while over half of the top 5% underpay.
Andrew Dixon on the panel
The Resolution Foundation brought together leading voices in the property tax reform debate to discuss the new analysis, with Fairer Share founder and chair Andrew Dixon among the speakers. You can watch the full event here.
Andrew congratulated the Resolution Foundation for their important work, and made the case why full scale reform is needed. For Fairer Share, the debate was a sign of how far the argument has come: property tax reform is no longer a fringe idea, but a mainstream conversation among economists, campaigners and politicians from across the parties.
Where Fairer Share's Proportional Property Tax fits
The Resolution Foundation's conclusion is the one Fairer Share has argued since 2020: Scrap Council Tax and Stamp Duty, and put a single tax on current property values in their place, raising the same money more fairly.
The common ground is substantial:
- Replace both taxes, together. The Foundation warns that scrapping Stamp Duty alone would hand a giveaway to the best-off. We agree.
- Proportional to today's value. No more 1991 bands, and no more £100,000 homes paying a higher rate than £1 million ones.
- Revenue-neutral. This is about fairness, not a tax grab.
- Protection built in. Both models include help for those who struggle to pay, including deferral until sale.
There are differences in the detail. Our Proportional Property Tax is set at 0.48% of current value, and under it 77% of households would pay less, saving £556 a year on average. The Foundation's modelling uses a 0.7% rate and a phased route to getting there. These are questions of design, and the commission the Foundation proposes is exactly the place to settle them.
What matters is that the direction of travel is now shared by campaigners, economists and one of the country's most influential think tanks. Fairer Share's Proportional Property Tax remains a leading proposal for how to get there.
The Autumn Budget is the moment
The Resolution Foundation's first ask is simple and cheap: use the Autumn Budget to start building an up-to-date database of property values. Without it, no serious reform can happen. Every Budget that passes without this step pushes fair property tax further away.
MPs need to hear that their constituents want fundamental reform of our property taxes. It takes 30 seconds to email yours and ask them to back an independent review of property taxes.
Independent Analysis Strengthens the Case for Property Tax Reform
Fairer Share welcomes a detailed new analysis of our Proportional Property Tax proposal by the independent Property Tax Lab. This is exactly the kind of constructive scrutiny the debate around property tax reform needs.
Property Tax Lab has tested the Fairer Share proposal using its own residential property model, based on more than 900,000 property valuations and weighted to reflect England's housing stock. Its conclusion is encouraging: 83% of dwellings in England would pay less under a Proportional Property Tax set at 0.48% than they currently pay in Council Tax.
Although its methodology is not directly comparable with Fairer Share's estimate that 77% of households would benefit, Property Tax Lab concludes that our central claim “holds up; if anything it is conservative”.
The analysis also vividly illustrates the fundamental unfairness of Council Tax. Property Tax Lab estimates that 98% of homes in the North East, 95% in the North West, 96% in Yorkshire and the Humber and 97% in the East Midlands would pay less under PPT.
At local authority level, it estimates that 100% of homes in Hartlepool and Middlesbrough would pay less, with average annual savings of £1,353 and £1,332 respectively.
The underlying reason is straightforward. Council Tax bills are still determined by property values from 1991 and bear increasingly little relationship to what homes are worth today. Property Tax Lab estimates that Band A households pay Council Tax equivalent to an average 1.08% of their property's value each year, compared with just 0.13% for Band H.
The importance of abolishing Stamp Duty
Property Tax Lab also finds particularly strong evidence for the economic case for abolishing Stamp Duty on primary residences. This is the other central element of Fairer Share's proposal.
Its modelling estimates that abolition could increase housing transactions by around 8.8%, equivalent to approximately 76,000 additional sales a year, while removing an estimated £804m of economic deadweight loss annually and enabling around 16,000 additional long-distance moves.
This is fundamental to the Fairer Share proposition. Property tax reform should not simply redistribute an existing tax burden. It should help create a better-functioning housing market by making it easier for people to move for work, families to find appropriate homes and older homeowners to downsize. That is why Fairer Share has consistently argued that Council Tax and Stamp Duty should be considered together.
Constructive challenges
Property Tax Lab also raises important questions about the detailed design of PPT.
It argues that the original 0.48% rate, calculated using 2019 revenues and property values, should be updated to reflect today's tax base and Council Tax revenues.
Its modelling suggests a revenue-neutral rate would now be higher, although it also acknowledges that its calculations exclude Fairer Share's proposed 0.96% surcharge on second homes, empty homes and properties owned by non-residents, which would raise additional revenue.
This is a useful contribution. Any government implementing reform would clearly need to set the rate using the latest property values, revenues and policy assumptions.
Property Tax Lab also identifies a potential problem with Fairer Share's proposed transitional protection, which limits increases for existing homeowners to £1,200 a year until the property is sold.
It argues that removing this protection on sale could create an incentive for some owners of high-value properties not to move, partially offsetting the mobility benefits of abolishing Stamp Duty. It suggests considering a time-limited transition instead, under which households gradually move towards their full PPT liability irrespective of whether they sell.
We think this is an interesting proposal that deserves further modelling. The objective should be to protect existing homeowners from sudden increases without creating unnecessary barriers to moving.
The analysis also raises legitimate questions about deferral, the economic incidence of transferring legal liability from tenants to owners, revenue stability and the administration of regular property valuations.
None is an argument against reform. They are questions that need to be answered in designing it. Indeed, Property Tax Lab itself concludes that its reservations are “about design, not direction” and that none of the issues it identifies is fatal.
Modern valuation is achievable
Another important conclusion concerns valuation. One of the most frequent objections to property tax reform is that regularly valuing around 25 million homes would simply be too difficult.
Property Tax Lab reaches a different conclusion. It says annual automated valuation of England's housing stock is “within the current state of the art”, while rightly highlighting the need for investment, transparency and an effective appeals process.
That is significant. We should no longer be asking whether it is technically possible to establish what homes are worth in the 21st century. The question is how we build a transparent and trusted system for doing it.
Exactly why we need an independent review
Perhaps the most important conclusion from this work is that fundamental property tax reform is both necessary and achievable, but getting the detail right matters.
That is exactly why Fairer Share is calling for a full, independent review of Council Tax and residential Stamp Duty. We need government, economists, property tax experts, the Valuation Office Agency, local government, housing specialists and taxpayer representatives around the same table.
An independent review should examine the appropriate rate, valuation methodology, transitional arrangements, deferral, owner liability, revenue allocation and protections for those unable to pay.
It should also properly assess the wider economic benefits of abolishing Stamp Duty: greater mobility, more downsizing, better use of Britain's housing stock and improved labour-market mobility.
Fairer Share has put forward a detailed proposal for reform. We do not claim that every implementation detail should be immune from challenge or improvement.
Quite the opposite.
After 35 years of Council Tax based on 1991 property values, Britain needs a serious, evidence-led debate about what should replace it. Independent analysis such as this helps us have that debate.
We thank Property Tax Lab for such a detailed and constructive contribution.
Press Release: Reforming property taxes would deliver £50 million spending boon across Middlesbrough
The Prime Minister has been urged to launch a fundamental review of property taxes at the Budget as new research reveals that replacing Council Tax and Stamp Duty with a Proportional Property Tax would deliver a £51.2 million boost to high streets across Middlesbrough.
The analysis by campaign group, Fairer Share, estimates the additional annual spending that could result from a Proportional Property Tax. It shows that resulting spending uplift – where the average household in Middlesbrough would save £850 a year - could lead to people across the area spending more in the local high street, handing a much-needed economic boost to cafes, restaurants and shops.
Using official Office for National Statistics data to forecast spending patterns based on recent trends, Fairer Share believes Middlesbrough could benefit in a number of ways including:
• As much as £3.3m a year would be more spent in local restaurants and hotels.
• £4.3m would be spent on household goods and services and clothes and footwear,
assuming all savings are spent and in line with current UK household spending patterns.
• £5.8m on recreation and culture, a broad category including cinema tickets, gardening equipment and sports tickets.
• £10.8m towards housing and energy costs, helping Middlesbrough households meet some of the biggest pressures identified during the cost-of-living crisis.
The current Council Tax system, based on property evaluations from 1991, sees families in Band D properties in Middlesbrough pay £2,548 a year in Council Tax, compared with just £1,047 in Westminster despite homes in Westminster being worth many times more.
Andrew Dixon, Founder of Fairer Share, the campaign group for a Proportional Property Tax, said: “Our analysis shows the economic impact of property tax reform in Middlesbrough. If this is a government serious about the cost of living, reforming two outdated property taxes should be part of the answer. By putting more money back into people’s pockets, reform would boost demand, support high streets and hospitality, and help drive growth across the wider economy.
“The upcoming Budget should be the moment the Government starts a serious, independent review of Council Tax and Stamp Duty. These are two taxes no government would design today, and we should be looking at how to replace them with a system that is fairer for households and better for growth.”
Luke Myer, MP for Middlesbrough South and East Cleveland said: "Local people and businesses would both gain from replacing Council Tax and Stamp Duty which unfairly hit areas like ours the hardest. I am backing the campaign for a Proportional Property tax to help boost the economy and provide help for the cost of living.”
Widespread dissatisfaction with Council Tax across the UK
August polling by Fairer Share shows widespread dissatisfaction with Council Tax. Nearly two-thirds of Britons (63%) describe Council Tax as unfair, while only 25% regard it as fair.
When presented with Fairer Share’s proposal to abolish Council Tax and residential Stamp Duty and replace them with an annual proportional property tax based on current property values, 47% supported the proposal and just 13% opposed it.
Nearly four in ten people across the North of England (38%) say reducing or replacing Council Tax should be a government priority for easing pressure on household finances, second only to action on reducing energy bills.
Fairer Share’s Budget submission called on HM Treasury to commission a full, independent review of Council Tax and Stamp Duty. The submission argues that the current system holds back living standards, housing mobility and economic growth, while leaving council revenues reliant on outdated property values and tax burdens inconsistent nationwide.
ENDS
Notes to Editors
For media queries, interview or op-ed requests: Fairer Share founder Andrew Dixon appears regularly in the media, and is available for interviews, quotes or op-eds. Please contact support@fairershare.org.uk. There are also wide-ranging resources on the Fairer Share website. For urgent queries, contact Tom Wilson on 07794014371.
Methodological note: The analysis estimates the additional annual spending that could result from replacing Council Tax and residential Stamp Duty with a Proportional Property Tax. It uses 2025 ONS data on household counts and local income profiles, alongside Fairer Share’s 2020 modelling on average household impacts from reform. The resulting spending uplift is allocated across categories using the latest ONS Family Spending data on how households spend their money nationally. The model assumes that the full household gain is spent. Figures are estimates and should not be treated as observed local area-specific spending patterns.
The previous Fairer Share polling referenced was a representative online poll of 2,048 UK adults between 1st and 4th August 2026, conducted by JL Partners, a member of the British Polling Council.
Press Release: Reforming property taxes could deliver high streets a £10 billion ‘Burnham boost'
• The average council would benefit from a £34 million spending boon as households have more disposable income under proposed changes to Council Tax and Stamp Duty
• Labour MPs urge the government to launch a fundamental review of property taxes at the Budget
The Prime Minister has been urged to launch a fundamental review of property taxes at the Budget as new research reveals that replacing Council Tax and Stamp Duty with a Proportional Property Tax would deliver a £10.1bn boost to high streets across the country.
The analysis by campaign group, Fairer Share, estimates the additional annual spending that could result from a Proportional Property Tax. With over three quarters of households set to benefit from lower annual bills, it shows this could lead to people across the country spending more in their local high streets, handing a much-needed economic boost to cafes, restaurants and shops across England.
The findings reveal:
• The average council area could benefit by as much £34.3m a year in additional spending.
• The research also reveals over a third of the areas likely to benefit most – 17 of the top 50 – are places where Labour has lost political control in the five past years. They span from Reform-run County Durham to Green-run Bristol.
• Country Durham would benefit the most, with the average household saving £900 a year as a result of a fairer property tax system. Those savings are calculated to lead to a £211m boon in local spending.
• Others in the top 10 are Leeds (£170m) and Sheffield (£150m), which both saw Reform and Green surges last year and where Labour only governs through a minority administration and coalition respectively.
Fairer Share analysed available data for 295 English authorities, with 279 predicted to see net gains in spending as a result of the average household benefitting from a £566 saving due to lower property taxes under a Proportional Property Tax.
Across England, the £10.1bn potential economic boost includes £2bn on housing and fuel costs, £1.3bn on transport, £1.2bn for food and non-alcoholic drinks, £1.2bn on recreation and culture, £680m additional spending on restaurants and hotels, £601m on household goods and services and £262m on clothing and footwear, if tax savings were all spent in line with current UK household spending patterns.
The analysis also highlights how the reforms could boost VAT receipts from higher household spending. It estimates that the reforms could be associated with approximately £91m more a year in VAT from hotel and restaurant sales alone.
Andrew Dixon, founder of Fairer Share, said: “This research shows overhauling our unfair and uneven property tax system could hand struggling high streets nationwide a Burnham boost, hand hard-up households a lifeline in the middle of a cost-of-living squeeze - and help Labour’s electoral fortunes too.
“The Budget should be the moment the Government starts a serious, independent review of Council Tax and Stamp Duty - two punitive taxes no government would design today. We should be looking at how to replace them with a system that is fairer for households and better for local growth.”
The study comes after recent Fairer Share polling also found 36% of respondents say they would spend any savings on ‘energy and other bills’, and 40% highlighted ‘food and other essentials’.
The August poll found 63% of the public regard Council Tax as unfair, 52% worry about affording next year’s bills.
Labour MPs have backed the call for a fundamental review of property taxes. Earlier this summer, Jonathan Brash MP established the Fairer Council Tax Group, which will use a fringe event at the upcoming party conference to urge the government to create a fairer system.
Sam Rushworth, Labour MP for Bishop Auckland, said: "It cannot be right that people in Bishop Auckland and County Durham in a Band D property pay nearly £1000 a year more in Council Tax than someone living in a band D home in Kensington & Chelsea, yet they get less for it.
“Both residents and businesses stand to benefit from scrapping Council Tax and replacing it with a fairer, more proportional property tax.”
Paula Barker, Labour MP for Liverpool Wavertree, said: "Liverpool's residents and businesses both would gain from reforming Council Tax. I am backing the campaign for a Proportional Property Tax to put money back in people's pockets and tackle this unacceptable injustice.”
Blackpool’s Labour MPs Chris Webb and Lorraine Beavers said in a joint statement Council Tax was “punitive and unfair”, adding: “We support the campaign for a Proportional Property Tax to put money back in people's pockets and deliver for the working people of Blackpool.”
Fairer Share’s petition for a review this summer reached 100,000 signatures, meaning MPs will likely debate it. The government was already considering reform proposals shortly before Andy Burnham became Prime Minister. He has repeatedly endorsed property tax reform, including Council Tax and Stamp Duty.
Top 20 local authorities by potential economic boost
Notes to editors
Methodological note: The analysis estimates additional annual spending that could result from a Proportional Property Tax. It uses Fairer Share’s modelled average household gains from reform, based on 2020 data, and recent ONS household counts and local income profiles. The resulting spending uplift is allocated across categories using national-level ONS Family Spending data on household spending patterns.
The model assumes full household gains are spent. Polling referenced was a representative online poll of 2,048 UK adults, conducted 1st-4th August 2026 by JL Partners, a member of the British Polling Council.
For media queries, interview or op-ed requests: Contact fairershare@pagefield.com.
Founder Andrew Dixon appears regularly in the media, and can be available for interviews, quotes or op-eds. The Fairer Share website has many resources. For urgent queries, contact Tom Belger on 07964 421 759 or Tom Wilson on 07794 014 371.
Our Autumn Budget Submission: Time for a Fairer Property Tax
Fairer Share has made a Budget submission because the Autumn Budget is an opportunity to begin serious, evidence-led reform of two taxes no government would design today: Council Tax and Stamp Duty.
One is still based on 1991 property values, while the other penalises people for moving home. Together, they place unfair pressure on households, weaken housing mobility and leave councils trying to fund modern services through an outdated tax base.
Our six-page submission sets out why HM Treasury should commission a full independent review of both taxes, and assess how they could be replaced with a fairer, simpler and more pro-growth property tax based on current values. You can read the full submission here.
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.