Replace existing property taxes with new proportional system, says think tank
Bright Blue, a liberal conservative think tank, has proposed replacing the UK’s current property taxation system with a new Annual Proportional Property Tax (APPT) to help “level up” the country.
Bright Blue said that some sort of APPT would be the best solution in terms of both economic and political grounds to replace the current stamp duty and council tax system.
Under the think tank’s proposals, there would be an APPT on the current capital value of houses, with a tax exemption for properties worth up to £50,000, and an additional 25 per cent surcharge on second homes.
The new gradual tax would seek to raise the same amount for government as the existing system, but would be more reflective of the value of a home.
CEO of Bright Blue Ryan Shorthouse said the current property taxation system provides significant advantages to those who have – or are from families with – substantial wealth, and is quite punishing to those with relatively little.
“An annual proportionate property tax system would change that, making property tax liabilities much more manageable for those from modest backgrounds and areas,” he continued.
“If the government is serious about levelling up the country, it needs to focus on reforming this country’s taxation, not just spending.”
Fairer Share founder Andrew Dixon added: “The case for a proportional property tax is becoming harder and harder for our politicians to ignore.
“Fairer Share has already shown how 76 per cent of households across England would be better off under PPT.”
Bright Blue said a share of the taxes collected should go to the national government, while a share should go to local authorities.
Former Treasury minister David Gauke added: “No one could argue that our current system of property taxes is ideal and this paper makes a powerful case for fundamental reform on the grounds of economic efficiency and fairness.
“This is a valuable contribution to the important debate on how we should reform our property taxes.”