Bills could fall by more than 10% if council tax was replaced by a progressive property value levy, a charity has said.
Warning the council tax system in England is ‘decaying and lacks credibility’, the Joseph Rowntree Foundation (JRF) has called for further investigation into the potential for a hybrid property and income tax.
Under this hybrid, almost two thirds of households could see bills fall by a tenth on current council levies.
A progressive property tax would also reduce gross median bills for the poorest 10% of households by £202, while increasing them for the top tenth by £184 – according to After the council tax.
However research concluded introduction of a property value tax could force an ‘undue burden’ on low and middle-income households in the capital – the city requiring its own scheme.
‘Overall, the introduction of a flat rate or progressive property tax would bring about a more progressive distribution of tax burden,’ the report found.
Policy and research manager at JRF, Kathleen Kelly, 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 re-valued 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.’
