Government urged to scrap council tax and stamp duty

Chancellor Rishi Sunak is being urged to use next month’s Budget to scrap council tax and stamp duty and replace them with a single new property tax.

Campaigners, backed by some Conservative MPs, say 19 million households in England – 76% – could be better off under a new proportional property tax.

According to the Fairer Share pressure group, 97% of households in all the 44 so-called “red wall” seats in England which the Tories took from Labour at the last general election would benefit, with an average saving of £660 a year.

It said that setting the rate at 0.48% of a property’s value based on current prices would bring in the same revenue as the council tax and stamp duty combined – with the tax to be apportioned between central and local government.

Overall, the group said households in England would be on average £435-a-year better off under the new system.

It acknowledged that basing the rate on current property prices – unlike the current council tax bands which are based on 1991 valuations – would mean households in London would pay more due to the “extreme” rises in house prices in the capital over the past 30 years.

However, it said that any increases should be limited to £100 a month until the property was sold.

Kevin Hollinrake, chairman of the Property Research Group of Tory MPs which campaigns for reform of the property tax system, welcomed the proposal.

“The time is right to put fairness back at the heart of how we tax property. It would also boost transactions throughout the market, creating huge economic output at a time when we most need it,” he said.

Aaron Bell, who took Newcastle-under-Lyme from Labour for the Tories at the 2019 election, said: “I believe it is time for the Treasury to be bold and consider a fundamental reform to our taxation of property, such as a proportional property tax.”

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