A REPORT by the York-based Joseph Rowntree Foundation is calling for council tax to be replaced by a new ‘progressive’ property tax which would cost poor families less.
The research, ‘After the Council Tax: impacts of property tax reform on people, places and house prices’, examines the impact of replacing the system which it says has become unfair, unpopular and outdated.
The research team at Heriot Watt University says Council Tax is regressive, taking a larger proportion of money from low income households in cheaper properties.
A foundation spokeswoman said one option examined in the report was a progressive property tax, phased in over time and based on property values, which would cut bills for two-thirds of households.
“A progressive property tax would shift the burden from poor families in cheaper properties, to richer ones in more expensive properties,” she said.
“This reform would bring about a greater level of fairness between people and places, the report authors conclude.
“The modelling suggests that bills – currently just under £1,400 a year under Council Tax - would fall by £202 a year for the poorest, cut the median bill by £279 a year and increase them by £184 for those on the highest incomes.”
Kathleen Kelly, Policy and Research Manager at the foundation, said: “Politicians need to start planning for the long-term replacement of Council Tax. Council Tax was a hasty replacement for the hated Poll Tax 25 years ago. It was never designed to last and has not been revalued for over 20 years: without reform, it will wither and die.
“Freezing bills is a treatment but a long-term cure is needed. This is a difficult reform to carry out, and one which requires courage from all the main political parties. But the problem will not go away and failing to plan for alternatives is storing up trouble for the future.”
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