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.