A group of experts has told the government the change has to be made
Ramping up the steepest council tax rates whilst cutting those for lower band properties could generate £3 billion for the public coffers, according to a think tank known to wield influence over Government policy. The Institute for Public Policy Research (IPPR) has proposed a 100% hike in council tax for those residing in the priciest band H properties, typically valued at over £1.5 million.
Levies on band F and G properties should also surge by 50%, the IPPR argued, whilst those in the most affordable council tax brackets should see their bills slashed. The shake-up could yield nearly £4 billion, the research suggested, with £1 billion of that sum potentially reinvested to deliver average savings of £45 for the 80% of households occupying cheaper A to D band homes.
The think tank emphasised this would rebalance the levy, which it claimed has become unjustly skewed, with residents of smaller, more affordable properties typically shouldering a disproportionately larger burden, reports Plymouth Live. It highlighted how Kensington residents in west London pay less council tax on average than Blackpool inhabitants, despite owning considerably more valuable properties.
Aditi Sriram, IPPR economist and principal author of the research, said: “The current council tax system is unfair, inefficient, and long past its sell-by date. Our proposal cuts bills for the vast majority of households while asking those with the greatest property wealth to pay a fairer share. It’s a reform that supports working families, strengthens local services and lays the foundations for a fairer tax system.”
The IPPR also proposed that a levy on overseas purchasers buying UK properties should be hiked from 2% to 6%, partly aimed at discouraging speculation within the housing market. Overall property taxation requires overhaul, which ought to include a comprehensive council tax revaluation by the end of this Parliament, with a view to clearing the path for a “proportional” property tax, the paper proposed.
Carsten Jung, IPPR associate director for economic policy and co-author of the report, said: “This reform can be a first step towards taxing property in a more balanced way. Millions of families would see a small decline in their bills – especially in less prosperous parts of the country – with more to come if the Government go for further reform.
“This is exactly the kind of policy we should expect from a Government relentlessly focused on reducing the cost of living.”
