Millions of households across Britain could see their council tax bills reduced under a radical new plan proposed by a leading think tank. The scheme aims to rebalance the system, offering relief to the majority while increasing contributions from owners of the most valuable homes.
The Fairer Tax Proposal
The Institute for Public Policy Research (IPPR), an organisation influential with the Government, has put forward a plan for a significant council tax overhaul. The core of the proposal involves doubling the council tax for Band H properties, which are typically valued at over £1.5 million.
Furthermore, households in Bands F and G would see their bills rise by 50%. The revenue generated from these increases would then be used to facilitate cuts for the 80% of homes in England situated in Bands A to D.
Addressing Regional Disparities
The IPPR argues that the current system is fundamentally unfair. They highlight a striking example: a resident in an affluent area like Kensington often pays less council tax than someone living in a more modest home in Blackpool, despite the property value in Kensington being far higher.
This reform is designed to correct such imbalances. According to the think tank's analysis, the changes could raise nearly £4 billion for local councils. Around £1 billion of this would be directly reinvested to reduce bills for those in lower-band, more affordable homes, offering an estimated saving of £45 per year for most eligible households.
Broader Reforms and Future Vision
Aditi Sriram, an economist at IPPR and the lead author of the report, stated: “The current council tax system is unfair, inefficient, and long past its sell-by date. Our proposal cuts bills for the vast majority of households while asking those with the greatest property wealth to pay a fairer share.”
Beyond the immediate council tax changes, the IPPR has suggested additional measures. These include raising the extra tax on foreign buyers of UK homes from the current 2% to 6% to discourage property speculation.
Looking to the future, the think tank is calling for a full review of council tax by the end of the current Parliament. This could pave the way for a more comprehensive and fairer property tax system in the long term.
Carsten Jung, associate director for economic policy at IPPR, emphasised the immediate benefits, saying these changes could help millions save money, particularly in less well-off areas. He added, “This is exactly the kind of policy we should expect from a Government relentlessly focused on reducing the cost of living.”
If implemented, this would represent one of the most substantial changes to council tax in decades, directly impacting household finances across the country.
