Stamp Duty is collected centrally and funds central government programmes.

The government depends on important tax receipts to pay for all the services we rely on. Stamp Duty on domestic homes in England raises around £8 billion a year.

Stamp Duty is based on the purchase price of the property and the following scale:   

Below £125,000 = 0%

£125,001 – £250,000 = 2%

£250,001 – £925,000 = 5%

£925,001 – £1.5 million = 10%

Above £1.5 million = 12%

Second homes are taxed at a higher rate.

Stamp Duty makes home ownership harder to attain. It also discourages older people from downsizing and increases the costs of moving home for all. Unlike most taxes, Stamp Duty is only paid by a small minority of the population each year. Around 1 million people pay the tax and have to cover the cost of raising the £8 billion the government needs.

Abolishing Stamp Duty would remove a barrier to homeownership for millions of young families and make it easier for older households to downsize. Our proposed PPT would instead spread the burden of Stamp Duty across 23 million homes, which would mean that, instead of one large tax bill each time someone buys a home, the tax is spread across the period of property ownership.

London and the South East. Homes in these areas currently pay a whopping £5 billion a year, which is 61% of Stamp Duty receipts. Compare this with the whole of the North, which pays just £830 million.

This is the rate required to raise the same amount in revenue as the current system.

Yes, we did and we understand the arguments for it. We are, however, a nation of home owners and data on house prices is far more prevalent than that on rentals. As a data driven campaign, it was important for us to be able to measure the impact of a policy as widely as possible. We also believe that the majority of homeowners have a better understanding of their house price but would be less certain of their rental value.

Council Tax, Stamp Duty and the Bedroom Tax.

The Bedroom Tax, or under-occupancy penalty, is a cut to your housing benefit if you have a spare bedroom in a council or housing association property. It is both unfair and has failed to improve housing efficiency as intended. To see why, take the example of a spare room becoming available when a member of a household moves out. If the remaining residents cannot afford their housing costs after receiving a cut to their housing benefit or universal credit, and are unable to move home, this leaves them in a very precarious position. We believe that those on benefits should not be penalised for having a spare room when others are not.

No. The PPT will not decrease tax revenues. The tax will be collected by central government and distributed to local councils accordingly. Central government already redistributes wealth through such grants. These play an important role in the size of local budgets and how much Council Tax must be raised locally.

• More tax revenue gained from empty and second homes. 
• Fairer tax rates for less expensive homes across the country.
• Incentives for developers to begin building homes as soon as they receive planning permission, rather than waiting indefinitely in case the value of the land increases.

We believe that the owner is in a better position to pay and that it simplifies the system from a collections and administrative perspective. This solution also enables us to offer a deferral mechanism for those who may be struggling to pay. And finally, a majority of homes are owned by those that live in them.

Yes, we do think that landlords may pass on some or all of the Proportional Property Tax (PPT) to the tenant through increased rent. However, there are a few other elements to consider.

• 77% of properties will see a reduction in Council Tax (CT). Therefore, it is likely that the landlord will pay less PPT than the tenant is currently paying in CT. As a result, the tenant will receive a net gain as future rent + PPT will still be less than the current rent + CT.
• Our policy taxes unused, underused properties and unbuilt planning permissions, as well as second homes. Subsequently, we should see an increase in the supply of rental houses and a possible decrease in rents.
• Should the tenant wish to buy his or her own property there will no longer be a Stamp Duty charge so it could be cheaper to get on the property ladder.
• The removal of Stamp Duty makes it cheaper and easier to downsize which should bring more, and often larger, properties to the market.

Any increase in PPT is capped at £1,200. Under the PPT, those who cannot afford to pay the tax have the option to defer payments and pay a modest interest rate. You can pay your tax bill when your situation allows you to do so, such as upon sale of the property. There will be no more court cases for bills in arrears as happens regularly under Council Tax.

This is a tax cut for around 19 million households. Across the country, the tax would see HM Treasury gain £5.6 billion in surplus revenue.

No. The rate will remain fixed at 0.48%, if house prices rise as they have historically then the amount paid will rise inline with the average rise across the last three years. If house prices are flat then the PPT will be unchanged. If prices fall you will pay less. The system acts as an automatic stabiliser, in tough times your bills would feeze or fall.

Great question. A number of think tanks have suggested a local Income Tax. However, we feel that hard-working families up and down the country already pay enough Income Tax. We don’t think this is fair, especially those who are young and cannot afford to buy their own property. Out of curiosity, will you save under this reform? https://fairershare.org.uk/counciltaxcalculator/

A flat rate tax is one where the tax rate remains the same but the amount raised increases with the value of the item taxed. This is  fair – we should all pay the same rate.

Second homes remove properties from the market that could be housing local families, meaning the government must fund new roads and schools to supply new homes elsewhere. The higher rate ensures that these homes pay a fair share for the costs the rest of society must shoulder.

Foreign homeowners are less likely to pay Income Tax, National Insurance, Capital Gains Tax or Inheritance Tax. However, they still benefit from the services that the rest of us fund, including the legal system, the transport network, schools and even local parks. These services also all make their properties more valuable. Our solution ensures foreign home owners pay their fair share in funding these important services and infrastructure.

No. Currently Capital Gains Tax is not paid when you sell your principal home. If you sell a second home or an investment property you pay tax based on the profit you have made. Our policy does not change this.

No. All properties will pay the tax. Those who register offshore will pay double the rate, because unlike other assets you cannot move a home offshore. If these owners do not pay, then a charge will be registered against the property for collection on sale.

Properties in London and the South East have seen the greatest increase in value since council tax was introduced. This means that for almost three decades they have benefitted from lower Council Tax bills, enabling these households to spend more on mortgages. Households in London in particular have also benefited from rising house prices linked to the government spending large amounts of money raised from all taxpayers on projects such as the Olympic redevelopment, Crossrail, Jubilee Line extension and other public transport subsidies. And any immediate increase will be capped at £1,200 per year, which is £100 per month.

Great question. The purpose of taxation is to fund the services from which all of society benefits, whether that’s education, policing or adult care. These are core services that local government delivers and over 50% of local government funding comes from existing taxes on domestic property. Our proposal ensures that we all contribute the same fair share of our property wealth, unlike the current broken system which asks the poorest to pay proportionally more for the services we all depend upon. Whether or not you as an individual use these services should not affect how they are funded. For example, those who choose private healthcare or education cannot opt out of funding the NHS or schools.

We believe that the purpose of taxation is to fund the services from which all of society benefits – education, policing, adult care etc. Our proposal ensures that we all contribute the same fair share of our property wealth, unlike the current broken system which asks the poorest to pay proportionally more for the services we all depend upon. A large number of adults living under the same roof could be a reflection of their lack of financial independence. Out of curiosity, will you save under this reform? https://fairershare.org.uk/counciltaxcalculator/

No one will have to sell their home. If you cannot pay in the short term you can defer the tax (paying a modest interest rate).

Not really. However, those in valuable properties have a good deal of political clout. There is always the risk that the beneficiaries of this sort of reform pocket their savings and whilst those who pay more kick up a big fuss. We have maintained Stamp Duty and added a PPT surcharge for second homes and foreign buyers so the cap only applies to primary homes. When properties change hands the cap will be removed and the new owner will be paying the 0.48% rate on the property. This process eases the transition from Council Tax to PPT.

The greatest benefits will come from the reduction of tax bills for millions of households outside London. This means people will have more money to invest and spend in their local communities.

Yes. They will neither have to pay Stamp Duty, nor fill in paperwork to apply for exemptions. We would also expect to see more family homes come onto the market as older households downsize.

If the pensioner lives in a valuable home any immediate increase will be capped at £1,200 per year, which is £100 per month. Those liable for the tax will have the option to defer payment until sale of the property or choose to downsize or move to locations with lower house prices. They would benefit from not paying Stamp Duty and enjoy lower PPT bills. Indeed, research shows that many older households would like to downsize but the cost of Stamp Duty prevents them from doing so.

Great question.

1. Valuable properties will pay the 0.48% proportional rate, something they are not doing currently.

2. Empty, second and foreign homes will pay 0.96% proportional rate on the value of the property.

3. Stamp Duty remains in place for second and foreign home buyers.

4. The number of bill payers will be reduced by at least 4.5 million, saving £400 million in administration costs.

5. We have removed a number of discretionary exemptions and loopholes.

We already have two kinds of Mansion Tax in this country and our proposal would get rid of both of them.

Firstly, the PPT would stop people being taxed at disproportionate rates that leave them unable to pay their Council Tax, a tax that does not reflect the actual value of their homes. Secondly, it would scrap the Stamp Duty that unfairly punishes people who aspire to climb the property ladder.

The replacement is a simple, fair, flat rate tax that doesn’t penalise people for being wealthy, it just creates a system where everybody can understand why and how much they are paying. These are the principles that should underpin all types of taxation and they do not exist in the current system.

No. This tax is based on the overall value of your property, unlike the so-called “Garden Tax”, which uses a square metre rate and applies it to the amount of land your home takes up.

Yes, but not a great deal. If we assume you spend £10,000 on home improvements, leading to a £20,000 increase in your house value. In this situation, you would pay an additional £96 per year in PPT. This dwarfs the £10,000 from the increase in the property value. And assuming £5,000 of the £10,000 improvement cost is spent on materials the homeowner would have paid £1,000 in VAT, generated £10,000 in increased value and would be paying just £96 per year in additional PPT.

No.  This important reform solely affects residential property owners.

Yes. Many modern and successful economies have proportional property taxes, including Australia, several Scandinavian countries, Singapore, Hong Kong and parts of the United States. It’s a tried and tested policy.

No. It is a much simpler and cheaper system to run. Valuations will use real data from prices paid at sale to keep the system updated. The change from billing tenants to  landlords will save councils the time and money of collecting 8.7 million Council Tax bills.

The existing Valuation Office Agency (VOA) will continue to be responsible for valuation, though under our system most valuations will derive from actual sales data and recent changes to house values in your area. We believe the government could use the wealth of data it already has to build an algorithm similar to those used by websites like Zoopla and Rightmove in making their estimates. Such a system would allow each and every home to be accurately valued based on its unique characteristics.

Council Tax could be made fairer by adding many more bands, but those at the top would still not pay their fair share. Moreover, within each band there would be a wide range of house prices all expected to pay the same amount. Only a proportional tax will ensure we pay in line with the real value of our property. Other respected organisations that have looked at Council Tax reform have also rejected this idea.

Yes. However, it is more difficult to regularly value land than residential property. In any case, property values and land values are closely related so that calculating the tax on the value of the property does not lead to a very different result.

Yes, we did consider it. To scrap Inheritance Tax would cost around £5 billion per year which would have required the PPT rate to increase from 0.48% to 0.58%. This would have meant fewer households would have gained from this reform, but this is also a matter of principle. Due to the high threshold (married couples do not pay any Inheritance Tax up to £1 million) less than 5% of estates actually pay the tax. Removing Inheritance Tax as part of PPT effectively requires every property owner up and down the country to cover the bills of the few who actually pay Inheritance Tax. This did not seem fair.

You would pay monthly as with the current system.

Yes. The policy would be phased in over a three year period.

By scrapping Stamp Duty, we would expect to see an increase in the value of homes. However, this will be offset by some higher value homes paying more under the PPT than they currently do under Council Tax. In many cases the two changes would balance out to leave property prices unchanged.

Where planning permission is granted, the tax will be  based on the number of homes for which permission was granted. The nearest equivalent home (in terms of location, type and size) would be used to determine the value the completed home or homes would sell for. Land will be taxed whether it is developed or not, encouraging landowners to build or sell to someone who will.

Property taxation is a fair way to ensure people contribute to society based on their wealth, and are hard to avoid given the impossibility of hiding physical property offshore. The OECD has argued that “recurrent taxes on immovable property are the least harmful tax” and are to be favoured over income, VAT and corporate taxes.

Yes. Prior to the 1990s the UK’s domestic property tax was the Domestic Rates System, under which a percentage of the property’s implied rental value was taxed by local authorities. This meant that the tax was linked to property values, although this was complicated by local variation, a system of rebates and a lack of revaluation after 1973.

Yes. Our policy is based on recommendations from many of the leading think tanks in the UK. Within all the major political parties there are groups who have called for a proportional property tax.

Andrew Dixon – former Goldman Sachs, founder of ARC InterCapital, The Woodhaven Trust and Fairer Tax Campaign CIC.

Dominic Humphrey –  Research Fellow and data scientist specialising in property policy.

Max von Thun – policy expert and commentator with a wealth of experience across politics, think tanks, journalism and the private sector.

Adam Smith Institute

Barrow Cadbury Trust

Richard Blyth

Patrick Bond

Mark Braund

Sam Brittan

Centre for Progressive Policy

Sir Winston Churchill

Civitas

Coalition for Economic Justice

Common Wealth

Generation Rent

Green Party

Jock Coates

Philip Collins

Sir Andrew Dilnot

Henry George

Henry George Foundation

Ted Gwartney

Institute for Economic Affairs

Institute for Fiscal Studies

Institute for Global Change

Institute for Public Policy Research

Intergenerational Foundation

International Property Tax Institute

Jericho Chambers

Joseph Rowntree Foundation

Dr. Gavin Kerr

Labour Land Campaign

Land for the Many

Land Justice Network

Land Research Trust

Tim Leunig

Liberal Democrats

London Renters Union

Toby Lloyd

David Lloyd George

Caroline Lucas MP

Laurie Macfarlane

James Mirrlees

More United

John Muellbauer

New Economics Foundation

OECD

Onward

Oxfam

Duncan Pickard

Plaid Cymru

Julian Pratt

Priced Out UK

Progressive Capitalism

Promoting Economic Pluralism

Andrew Purves

Resolution Foundation

Rethinking Economics

RSA

Josh Ryan-Collins

Guy Shrubsole

Sir Roger Scruton

Shelter

Tax Justice UK

Taxpayers Against Poverty

Tax Watch UK

Tony Travers

Adair Turner

Andy Wightman

Carol Wilcox

Martin Wolf

YIMBY

Fairer Share received a grant from the Woodhaven Trust, a charity focused on the reform of unfair property taxes in the United Kingdom.

We need a large-scale popular movement to inform the wider public of the importance of property tax reform, and give them the tools to champion reform with politicians in Westminster. By signing our petition, you can help create this movement.

Tax will never be welcomed, but it should at least be fair. With the support of you, your family and your friends, we can bring about change and improve the lives of millions of people up and down the country.

If you have any questions, please email the team at support@fairershare.org.uk.

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Here is our full response to Neil O’Brien, Conservative MP for Harborough: Our Response to MP Neil O’Brien’s Review of PPT – Fairer Share Campaign

Here is our full response to feedback from Anthony Browne, Conservative MP for South Cambridgeshire: Our Response to Anthony Browne’s Review of PPT – Fairer Share Campaign

Here is our full response to feedback from Sir Paul Beresford, Conservative MP for Mole Valley: Our response to Sir Paul Beresford’s review of Fairer Share – Fairer Share Campaign

Here is our full response to the standard replies our supporters have received from Conservative MPs referencing Tower Hamlets: A Review of Tory MPs’ Standard Response to Fairer Share – Fairer Share Campaign