This report argues that the Council Tax band system in Britain should be abolished and replaced with a flat rate levy set by individual local authorities. Revenue from homes valued at £2 million or below would be retained by councils to pay for local services, while revenue from properties worth more than £2 million would be pooled and distributed nationally.
The flat rate levy would end the regressiveness of the current Council Tax regime which, among other things, sees the lowest value properties charged the same amount of tax as the highest value homes in each band. The change would also strengthen the link between taxpayers and local services and be a fairer way of rebalancing UK property taxation than an annual Mansion Tax on £2 million homes.
The latter featured prominently in the Labour and Liberal Democrat election manifestos but was rejected by the Conservatives in coalition government and is criticised by CentreForum for being “bad policy disguised as good politics”. A comprehensive analysis of the Mansion Tax proposal is contained in the report.
The report further recommends the establishment of a Royal Commission to consider the appropriate balance of taxes on property and the issue of “unearned economic rents on land”. It concludes that a reformed system of UK property taxation that is both effective and fair should have wide electoral appeal.