Calmed speculation over the future of Council Tax and Stamp Duty

Prime Minister Andy Burnham has moved to calm speculation over the future of Council Tax and Stamp Duty, confirming that his government has no immediate plans to replace either tax. This will come as welcome news for the housing industry, as rumours of major property tax reforms ahead of the Autumn Budget often lead buyers and sellers to hit pause on their moving plans.

While reform is not on the immediate agenda, it has not been ruled out entirely. Burnham has previously expressed support for reviewing the current system, suggesting the debate is far from over. For now, however, the government appears keen not to derail the property market.

One of the most widely discussed alternatives comes from campaign group Fairer Share, which proposes replacing Council Tax and Stamp Duty with a proportional property tax. Under its proposals, homeowners would pay an annual charge equivalent to 0.48% of the value of a property, rising to 0.96% for second homes.

Fairer Share

Fairer Share argues that the current Council Tax system is outdated as it is based on property valuations from 1991, meaning bills often bear little relation to what homes are worth today and do not reflect what people can afford. Stamp Duty, meanwhile, is a major blocker for those who wish to move home. The group estimates that households currently pay £35 billion in Council Tax each year, while the wealthiest 10% of households own around 38% of the country’s property wealth but contribute less than 28% of property taxes. The campaign claims that the reforms would make homeownership more affordable for younger buyers and increase disposable income for millions of households.

Tax comparisons

To understand the argument, let’s start with a simple comparison. Take a typical two-bedroom terraced house in Blackpool, and another in London. Despite the London property being worth seven times more, the difference in their council tax bills is surprisingly small, and, in fact, the property owner in Blackpool pays more than the one in London.

This example highlights the argument behind the Fairer Share scheme. Under the current Council Tax system, homeowners with significantly more valuable properties can pay similar, or even lower, Council Tax bills than those living in homes worth a fraction of the value.

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