Earlier this month, The Organisation for Economic Co-operation (OECD) released its 2020 Economic Survey for the UK – a periodic review of the economies of its member states. The 2020 review covered areas ranging from productivity to trade, in addition to an impact assessment of Covid-19 and Brexit on the UK economy.  

Encouragingly, the OECD also included a specific recommendation to reform Council Tax with a Proportional Property Tax – here is what they had to say:

“Council Tax could be increased to raise tax on high housing wealth. At the moment, the tax is charged at a much lower percentage of property value for high-value properties than for low-value properties. As recommended by the Mirrlees Review (2011), it would be simpler and more efficient to use a simple percentage of property value.

At the same time, this could be an opportunity to rebalance property taxes, moving away from stamp duties and transaction taxes. This would boost labour force mobility and encourage more efficient use of the housing stock. As Council Tax is local, resources could be used either to reduce the grant provided by the central Government to local authorities, or alternatively to finance services at the local level that have been cut recently.”

The OECD joins an ever-growing list of organisations advocating for the UK to adopt a Proportional Property Tax, including the IFS, IEA, Adam Smith Institute, IPPR, and Resolution Foundation, many of whom signed our open letter to the Chancellor calling for reform to the UK’s property taxes.

With the UK now firmly in recession and Coronavirus restrictions increasing, the case for a Proportional Property Tax has never been stronger. We hope the Government will listen to mounting calls for a new approach to property tax which is fair, simple and promotes aspiration.

You can read the full OECD report here.

You can read our Proportional Property Tax proposal here