Councils would be free to set their own levels of property tax under policy proposals being considered by the Liberal Democrats during party's annual conference, being held in Birmingham this weekend.
A policy document to be discussed by Lib Dems tomorrow will suggest replacing current council tax rates, based on 'fossilised' 1991 evaluations, with a residential property tax based on regular assessments of land value.
The proposal reads: 'Liberal Democrats believe that local authorities should be free to set their own levels of property tax. There is a strong need to move towards a more consistent and constant valuation system for residential property, rather than the current fossilised rates.'
It is thought assessments could be based on land values or a combination of the worth of both land and buildings.
Granting town halls further local tax-raising powers will also be proposed and the imposition of a 1% 'mansion tax' on properties worth more than £2m also considered.
Their proposals come despite Eric Pickles having earlier this week informed the Commons communities and local government select committee that increased local government financial autonomy will be restricted until 2015 to localised business rates, tax increment finance (TIF) and community budgets.
In confirming the scope of the coalition's review of town hall finances, the Communities Secretary effectively announced he had won his battle with deputy prime minister, Nick Clegg, whose party had pushed for a far wider review in the LGGR.
Mr Pickles did, however, admit discussions on extending councils' financial freedoms could begin prior to the year of the next election.
