Finance experts have urged Chancellor Rachel Reeves to use the upcoming Budget to reform council tax rather than rely on short-term revenue-raising measures.
Current council tax in England is still based on 1991 property values, creating inequities and limiting the system’s effectiveness.
The IFS Green Budget 2025 highlights that updating property taxes could raise significant funds for local authorities fairly, while reducing economic distortions caused by other tax hikes. Simply increasing rates or introducing new taxes on capital or income could damage growth and discourage investment.
Isaac Delestre, IFS Senior Research Economist, said: ‘The Chancellor should use this Budget to take real steps down the road towards a more rational tax system that is better geared to promoting the prosperity and well-being of taxpayers.’
