‘Replacing council tax & stamp duty should be the roadmap’: MPs push for property overhaul

Rishi Sunak 'knows his days are numbered' says expert

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Rishi Sunak has faced mounting calls to reform the tax system in his next Budget, as the Chancellor reportedly looks to cover coronavirus related spending. The Fairer Share campaign argued the introduction of a Proportional Property Tax (PPT) could provide a solution to this issue.

Fairer Share believe stamp duty, bedroom tax and especially council tax are important for the UK economy but are now outdated options.

Specifically, it notes council tax is based on property band values from 30 years ago, which results in cheaper property holders (or dwellors) paying more proportionally in council tax.

Currently, this is costing 24 million households in the UK around £35billion each year to fund.

To illustrate, Fairer Share calculated the council tax paid on a Middlesborough home worth £150,000 would be just over £1,702, whereas the tax levied on a £250million Westminster mansion would be around £1,560.

As a result of these findings, Fairer Share argued council tax is “broken, outdated, complicated and unfair”.

In recent months, the Government has focused on plans to “level up” the UK and limit arbitrary tax advantages for the wealthy.

To act on this commitment, Fairer Share has called on the Government to consider plans for a PPT.

The PPT would replace council tax, stamp duty and bedroom taxes and be levied on a flat rate of 0.48 percent on the current value of a property, which Fairer Share argued is easier to calculate than ever thanks to modern technologies and services.

A higher rate of 0.96 percent would apply for empty and second homes, and those owned by UK non-residents.

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The PPT would only be paid by property owners, not tenants and would result in nearly nine million people being exempt.

On top of this, property owners would still likely see a reduction in property tax, with analysis from the organisation showing 76 percent of households (18 million) would pay less.

Full details on the campaign can be found https://fairershare.org.uk/ but the group currently has support from a range of both Labour and Conservative MPs.

Additionally, the campaign has strong support from the public, with a petition calling for the PPT having received over 122,000 signatures thus far.

With Mr Sunak set to release his autumn Budget in the coming months, Andrew Dixon, the chairman of Fairer Share, issued fresh calls for the Government to implement the PPT.

“The Prime Minister often talks about levelling up the UK and delivering a fairer society,” he said.

“When he delivers his Budget this Autumn, the Chancellor should turn that rhetoric into reality by finally calling time on our highly regressive council tax system and bringing in a new proportional property tax.

“By doing so, the Government could directly help many of those people on the lowest incomes and in the poorest parts of the country who are hit hardest by council tax. A proportional property tax – which reflects current house prices, not those from 30 years ago – would be a much fairer system, benefiting younger generations and leading to lower bills for 18 million households across the country, especially in the Red Wall seats that the Conservatives gained from Labour in 2019.”

The Chancellor is also facing these pressures from within his own party, as the following comments from Conservative MPs detail:

Kevin Holinrake, Conservative MP for Thirsk and Malton

“Replacing council tax and stamp duty should be part of the roadmap for a fairer Britain. It’s a fundamental principle of taxation that taxes should be simple, transparent and fair, yet these taxes achieve none of those things.

“Council tax is based on property values that are thirty years out of date, taxes low-value homes at a much higher rate than high-value properties and pushes millions of households into debt. It is emblematic of a broken system that is no longer fit for purpose.”

Aaron Bell, Conservative MP for Newcastle-under-Lyme

“As our focus turns to economic growth, and to building back better, we will need to show in no uncertain terms that the Conservative Party has delivered on the promise to level up those towns and cities previously left behind.

“With the public finances stretched like never before, I – and an increasing number of Conservative MPs – believe the best way for the Government to show voters that this message has got through is by reforming our outdated property taxes. We should begin by overhauling Council Tax, which is not only based on property values that are thirty years out of date, but it is also deeply unfair – placing the heaviest burden on the young, low-earners, and those living in less prosperous parts of the country.”

John Stevenson, Conservative MP for Carlisle

“Our tax system has, over the last 30 years, become too complicated and full of red tape. It needs a fundamental overhaul.

“I would encourage the chancellor to be a reforming chancellor and look at ways to improve the tax system through simplification, but also addressing areas of unfairness. The proposals around reforms to council tax and stamp duty are very welcome and ones which I would support.”

Simon Fell, Conservative MP for Barrow and Furness

“I have been working with colleagues to understand what the alternatives might be to get the economy going again when we begin to bounce back from the pandemic. I am lobbying for a move to a proportional property tax, scrapping council tax and stamp duty in the process.”

Dehenna Davison, Conservative MP for Bishop Auckland

“At what is such an important time for our economy, there is now a real opportunity to come up with long term solutions to deal with geographical inequalities. One of those is the current property tax system.

“The proposals from Fairer Share would reform the system to simplify property taxes, introducing a proportional property tax which would see a huge boost for households on the lowest incomes.”

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