Bright Blue, a leading right-leaning think tank, has published a well-received report recommending that a new annual proportional property tax (APPT) should be introduced. Like Fairer Share’s reforms, the tax would raise the same amount for the Government as current property taxes, but more closely reflect the value of homes than the existing system that includes council tax valuations dating back to 1991.

The Daily Telegraph reviewed the reforms, highlighted the fairness of the proposals and encouraged their readers to comment.

Readers were asked: “Do you think stamp duty and council tax should be replaced? If so, what would you suggest as an alternative?” 

Below are the reader’s comments and our response to their suggestions:


@Neil Thomson:

“Although reviews of stamp duty and council tax are long overdue, I don’t think a property levy that hits the south of England disproportionately is fair or reasonable. 

“The tax subsidy from London and the South East is too high already and is cross-subsidising the other three home nations and the north of England levelling up agenda already. 

“The tax take on the south of England has increased disproportionately on income. To compound that with property taxes is punitive and represents a further disincentive to living and working in London, when the capital city has been hit very hard by the pandemic. Ministers need to think again.”

Fairer Share

Fairer Share’s proposal takes these concerns seriously, balancing the advantages and disadvantages very carefully. The removal of Stamp Duty would support those in the South East, limiting the impact of reforming Council Tax on the South East and London. We also cap any increase to £1,200 additional payments per year – just £100 per month for those in the most expensive households. 

It is also important to think about the broader issues facing the housing market. The current system is highly inefficient and stamp duty disincentivises downsizing. Freeing up properties through the removal of Stamp Duty would be a huge boon to the younger generations in the South East and London looking to get onto the market for the first time and for young families looking to move into homes of an appropriate size.


@TJ James:

“I have paid stamp duty on my property, which was significant. Why should double taxation be considered fair?

“We need more housing, not more tax pushing up the cost of housing. These people are living in a think tank bubble, not the real world.”

Fairer Share

The biggest concern financially is those who cannot afford their homes at all because of the regressive nature of council tax, whether in the South East or in Rother Valley. This is precisely not the concern that the think tank bubble is usually considered to over-correct for. 

At the point of transition from Council Tax to PPT, no household will see an increase of more than £1,200 per year. When there is a change of ownership the cap will fall away and the property will move to the 0.48% rate, but such buyers will have benefited from the removal of Stamp Duty. There would be no double taxation.

Overall Fairer Share is tax revenue neutral – this is not a tax increase overall. We are replacing the regressive Council Tax and the punitive Stamp Duty with a simple flat tax rate of 0.48% for all households (subject to the £1,200 cap). This means a fair and proportionate tax increase only for those who can afford it, while those who cannot will see a tax cut. 


@Martin Thomson:

“The biggest problems with any tax based on property value that I can see are firstly maintaining a realistic valuation, and secondly that no government would then have any incentive to prevent house price inflation – in fact quite the reverse.”

Fairer Share

House pricing is not centrally determined otherwise Governments may have had more success in reaching their targets of housing affordability. PPT would see tax rises in line with the value of the property. This increased tax should provide a “brake” function on any house price increases as demand for houses will be affected by the annual payments. For those who choose to afford high PPT payments because they live in mansions or multi-million pound homes, they will at least commensurately contribute to their local authority’s budgets. 

Our tax also aims to help the supply problem with house price inflation. By taxing at the point of planning permission being granted, we aim to see a greater degree of development, which should contribute to house cost reductions or at least the flattening of any house price increases. 


@Andrew Ryan:

“A tax raid on southern property wealth sounds like a fair idea to me, considering the current system is ‘regressive’ and ‘distortive’. We either believe in a proportional tax system where the wealthy pay more, or we don’t.”

Fairer Share

We agree that the system needs addressing, although a proportional tax system would not be a raid on property wealth in the South East any more than Council Tax is currently a raid on property wealth in the North East. Council Tax is unnecessarily regressive and needs addressing. We need a fairer system whereby those with the broadest shoulders carry more of the burden.


@Alice Taylor:

“I paid property tax that was based on the value of the house when I Iived in Texas. It’s a much fairer system. The outdated band system here in the UK doesn’t take into account the changes in values as neighbourhoods degrade and when they regenerate. It certainly doesn’t take into account the condition of the house or outside factors, like neighbours or views, that affect value. 

“The present system is very regressive and a poor person living in a terrace house that is a slum pays the same as the wealthy next-door neighbour who has the highest standard interior.”

Fairer Share

Well said. Many other countries have superior property taxes.


@Andrew Richards:

“If the annual tax is to be based on property values, then it’s a double whammy for anyone improving their home, and already paying VAT for improvements for the privilege.

“Property values are also market driven, so we are now in a boom period with values increasing by over 10 per cent, along with the new tax no doubt.

“Anyone expecting the new tax to reduce when property values fall is deluded.

“Many older people will live in expensive homes that they have saved for and paid for throughout their lives. Equally, their incomes will be typically far less in retirement.”

Fairer Share

Andrew’s comments are a nod to Land Value Tax which we certainly believe has its merits and has many supporters both in the economic and academic communities. However, it would be punitive in London and the South East. PPT balances both the economic benefits of LVT with a politically palatable solution that all parties can get behind.

With a rate of 0.48%, the tax equates to less than 1/200th of the increased value. Would a proportional property tax truly be a disincentive to increase the value of one’s property? Such a payment would be much less than the 20% VAT rate charged on materials, so it could be argued that a proportional property tax at 0.48% per year is no more of a disincentive to improve one’s home than VAT, which is charged at 20% and is paid upfront.

For owners of high value homes the increase in tax would be capped, so that at the point of transition, no household would see a rise of more than £100 per month (£3.29 per day). We would provide these households with the option to roll over the tax payment, at a modest interest rate, until point of sale or change of ownership.

However, any debts built up as a result of deferring a payment would be considerably lower than wealth gained from rising house prices. Assuming 4.8% annual house price inflation, housing assets would increase at 10 times the speed of any tax liability. House prices would have to increase at less than 0.48% per year for the tax debt to exceed the value of the housing asset.

Just to be clear, and this is a very important point, absolutely no one will be forced out of their homes. If they live in a modest home, they will see a reduction in their tax bill. If they live in a larger property, they can either choose to pay the additional charge, which even for the largest and most valuable homes would be capped at a £1,200 increase per year or they can choose to defer payment until they sell the property.


@TJ James:

“To change the current rules would be suicide for the Tories. All those with accrued property value bought on the basis of the current rules would feel hard done by. For instance, I’ve paid huge stamp duty when buying my house, why should I pay more tax having already settled the stamp duty?”

Fairer Share

Under the current system, someone who is planning to buy a £1 million home will have to pay £43,750 in tax before they have even collected the keys. Paying 4.8% over 10 years with Fairer Share is better than paying 4.4% up front. And, of course, the house buyer would be paying Council Tax as well over the 10 years – this could equate to a further 3%, and probably more.

Fairer Share’s policy is revenue neutral.

The political benefits are also clear. Freeing up homes across the country through a more efficient tax system will lead to greater numbers of younger homeowners, a leading indicator of Tory support. Furthermore, with both parties competing over voters in the North and Midlands, either could offer a lower tax bill for millions of their target voters.


@Ian Gladstone:

“Many folks have to live in a particular area by nature of their employment. Why should folks who live in a modest house in a good area pay more tax than someone in a large property in not such a good area? 

“Many people are struggling to pay their mortgage in a good area close to work. Let’s not hit them even harder with some poorly crafted tax grab.

Fairer Share

Fairer Share’s policy is revenue neutral and please see comments above.


@Nigel Phillips:

“Council tax is a poor system, but replacing it with a tax raid on southern property wealth would create massive increases for those in lower priced housing.

“The country has to repay its debts, I agree, but launching into a totally new scheme is madness. More thought is required, with a dash of common sense added.”

Fairer Share

Fairer Share’s policy is revenue neutral and please see comments above.


@Viv Oliver:

“The cost of living, particularly home ownership, in the South East already stretches normal hardworking people to the limit. We don’t need additional taxes based on already overpriced housing, and higher costs of living.”

Fairer Share

Fairer Share’s policy is revenue neutral and please see comments above.


@Alan Crawford:

“The big problem is that the many people who bought recently, who upscaled to minimise the number of moves and therefore minimise stamp duty over a lifetime, are effectively taxed twice. 

“Designing this fairly is much harder than people think. At a minimum you’ll need a carefully designed taper based on a multitude of factors. It’s not impossible, but it will require some serious economic analysis.”

Fairer Share

For owners of high value homes the increase in tax would be capped, so that at the point of transition, no household would see a rise of more than £100 per month (£3.29 per day).


@Steven Goodban:

“The current system has no doubt lost its way. With owners of very expensive properties in London paying far less than many in modestly valued properties in much poorer regions. This is not a property value tax in any shape or form.

“I quite like the idea of a property value tax along the lines suggested. Many European countries have had this in place for decades now and it seems a much fairer system.”

Fairer Share

We agree Steven.


@David Potter:

“A 25 per cent reduction in council tax is, to my mind, a step in the right direction but does not go far enough.

“A property tax based on the value of the house is a retrograde step as far as I am concerned. Unless an adjustment is made for single occupancy then I am sorry but that is plain wrong. Why should a single person pay the same tax as his neighbouring house where two people are wage earners? I do not benefit from twice the services so why should I subsidise more wealthier households?

“Likewise, why would I invest in, for example, a conservatory if that means that the value of the property increases and, therefore, my tax year after year, just because of the improvement?

“If a radical tax shakeup is required why not have a local income tax which would, at least, protect those homeowners on below average incomes? Those homeowners receiving a state pension would pay little whilst those on several times the average wage would pay more.”

Fairer Share

Of course, no system of property taxation will make everyone happy. But a scenario in which a small number of homeowners have enjoyed a large increase in property value and a much smaller rise in their tax bill is surely preferable to the current system under which many hard-working tenants face 5% annual increases in Council Tax whilst not benefitting from a commensurate increase in property value.

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. 

Some have suggested a local income tax but a hard day’s work is already adequately taxed and does not address the intergenerational issues. As we know, those with greater assets find a way to reduce their income tax obligations.

Households are already paying sufficient property taxes – the problem is that the wrong households are paying the wrong taxes at the wrong times. The current inequity exists within individual constituencies, between regions, and between the generations.

There is a growing political consensus that both Council Tax and Stamp Duty need to be reformed. As we begin to look beyond Covid-19 and deal with the inequalities that the pandemic has accentuated, we should seize the opportunity to scrap both of these taxes and bring in a fair and workable system of property taxation.