21st May 2021

Changes to Property Tax?

As we gradually move back to normality regarding Stamp Duty in September 2021, the Chancellor Rishi Sunak is once again being urged to abolish the current tax and replace it with a new levy.

The think tank ‘Bright Blue’ argues that scrapping the stamp duty holiday would stimulate greater activity in the housing market.

It wants to see stamp duty abolished all together, along with council tax, and both replaced with an annual property tax instead.

The new annual proportional property tax (APPT) would seek to raise the same amount for the government as existing property taxes, but more closely reflect the value of homes than the current system that includes council tax valuations dating back to 1991.

Ryan Shorthouse, chief executive of Bright Blue, the think tank that published the report, said it would help to level up the UK by focusing taxes on the better-off.

He commented: “The current property taxation system in England is regressive and distorted. It provides significant advantages to those who have – or are from families with – substantial wealth, and is quite punishing to those with relatively little.

“An APPT system would change that, making property tax liabilities much more manageable for those from modest backgrounds and areas.”

The new property tax, which could charge the owner 0.11% of the property’s value each year for the central government, plus a local charge set by councils, has been proposed by economists Paul Cheshire and Christian Hilber and backed by politicians including Labour’s Margaret Hodge, Conservative Lord Willets and Lib Dem Sir Vince Cable.

Watch this space….