Tory says “rich getting a free pass” on current property tax

A young Conservative says “the rich are getting a free pass” thanks to the current council tax system, and there should instead be a different, modern property tax.

Tom Spencer, writing on the Conservative Home website, says council tax was a hastily created fiscal measure to replace the hated poll tax, which is now out of date because it is based on property values at the time of its instigation 30 years ago.

“This means that homes which have had the highest amount of price growth will be paying based on an undervaluation of their property. And, of course, those in areas of poor growth end up paying based on a gross overvaluation” he writes.

“Effectively, this means the rich are getting a free pass and those on low and middle incomes are getting a rough deal. After all, the areas with high price growth over the last 30 years all happen to be the richest areas.”

He says the most popular alternative, advocated by at least eight Conservative and nine Labour MPs, would be a so-called proportional property tax.

“Instead of letting each council impose the tax at a different rate based on valuations older than this author, this will use modern technology to revalue properties annually, and tax everyone equally at 0.48 per cent based on the valuation” proposes Spencer.

He says this would prompt a tax cut for 75 per cent of current council tax payers.

His proposal comes just as the Housing, Communities and Local Government committee of MPs suggests something similar - either a fundamental reform and revaluation of homes to make the current council tax system work, or its replacement with a proportional property tax.

You can see Spencer’s full article here.