This week, a powerful voice joined the growing consensus that Britain’s property tax system is broken – and ready for reform.

In a striking piece for The Times, David Smith, the long-standing Economics Editor of the Sunday Times, lays bare the outdated, unjust, and economically damaging state of UK property taxation. His conclusion? It’s time to scrap both stamp duty and council tax and replace them with a fairer, proportional property tax.

At Fairer Share, we’ve been making this case for years. What’s new – and vital – is that mainstream, respected economists like Smith have been adding their weight to the movement for reform.

A Broken System: Regressive, Outdated, and Counterproductive

As Smith writes, “Britain taxes homes in a way that is outdated, damaging and economically outdated.” He highlights two core problems:

  • Council tax, based on 1991 property valuations, is deeply regressive. A three-bed semi in Blackpool can attract a bigger council tax bill than Buckingham Palace. Those in modest homes pay proportionally far more than those in mansions.

  • Stamp duty is a tax on mobility, disproportionately penalising people for moving; whether that’s downsizing, relocating for work, or finding a family home. It discourages sensible housing choices and chokes up the market.

Both taxes increased recently, hitting households at a time when costs are already high. Council tax bills have risen by an average of 5%, with a typical Band D property in England now paying £2,280. Meanwhile, the return to a lower zero-rated band for stamp duty means someone buying an average-priced home (£291,000) will now face a tax bill of £4,550 — a £2,500 hike overnight.

A Better Way: Proportional Property Tax

Instead of tweaking a broken system, Smith advocates for replacing it entirely with a proportional property tax (PPT) – exactly the kind of solution Fairer Share has championed.

He references proposals from Professor Tim Leunig of the London School of Economics, laid out in A Fairer Property Tax, a paper for the think tank Onward. Leunig, who was instrumental in designing the UK furlough scheme, calls for a tax based on the current value of a property; a transparent, economically rational model that would align tax liability with ability to pay.

Fairer Share’s version of the proposal is clear and deliverable: abolish council tax and stamp duty, and replace them with a proportional property tax levied at 0.48% of a home’s value. That would mean:

  • A £200,000 property pays £960 a year

  • No arbitrary bands or outdated valuations

  • Taxation based on real property values, fairly and simply applied

Addressing Common Concerns

What about the “asset rich but cash poor”, like pensioners in expensive homes? Smith is clear that this challenge is solvable. Fairer Share has proposed a cap ensuring no existing owner pays more than £1,200 more than they would under council tax. Only new buyers would face the full rate – a fair, transitional measure that avoids forcing people out of homes while enabling long-term reform.

Other ideas include spreading the cost of stamp duty (or its replacement) over 20 years via government loans, as suggested by the Tony Blair Institute, or applying a cap to prevent eye-watering bills on high-value properties.

The Case for Change Is Building

As Smith notes, economists and think tanks from across the spectrum are aligned. Professor Charles Goodhart advocates a land value-based version of the tax. The Tony Blair Institute recommends a phased introduction. The 2011 Mirrlees Review — led by Nobel laureate Sir James Mirrlees — also called for replacing council tax and stamp duty with a more rational, unified system.

These are not fringe ideas. They are serious, evidence-based solutions to one of the most flawed parts of Britain’s tax system.

The Political Opportunity

As Smith concludes, any chancellor bold enough to fix this would earn the respect of experts and the gratitude of voters. Reform would be progressive, economically sound, and potentially revenue-raising – all while reducing distortions in the housing market.

Yet so far, there’s been silence from the Treasury. That’s why we must keep pushing.

You can read David Smith’s full piece in The Times here.