IPPR calls on flat rate property rate to replace ‘unfair’ council tax
0The current council tax system in London is unfair, increasingly resembling the poll tax, according to think tank the IPPR.
In a new report, it said that the domestic rate system hits London’s poorest households more than six times as hard as the highest earners, according to a report.
Think tank the IPPR called on council tax to be devolved to the capital and its replacement with a proportional property tax based on a percentage of a property’s value.
The report said: “It is economically inefficient particularly because of its banding system, reliance on considerably outdated property prices and the inconsistencies between it, and commercial property taxation.
“Furthermore, it is increasingly unsustainable as a source of local government finance, a trend which is only set to continue.”
The IPPR analysis said a flat rate tax on property values of 0.25% would be fiscally neutral for London.
At this level, around 79% of households would benefit from the reform, the majority of which would be in the current bands A to C, it said.
Properties in the top bands (around 21%) would pay more under this option.
