A petition calling for the end of council tax sailed past 100,000 signatures this week, enough to secure a debate in the House of Commons. Only days earlier, the new Prime Minister, Andy Burnham, used his first big broadcast interview to float the idea that better-off homeowners in the South might soon see higher bills.
The petition is run by the Fairer Share campaign, which wants a Proportional Property Tax: a flat annual charge of 0.48% of a home’s value, replacing both council tax and stamp duty.
Strip the politics away and the proposals amount to a long-overdue correction of a tax base that’s been gathering dust for thirty years. The real question is whether Burnham, only a week into a premiership he inherited from Keir Starmer, has the political space to finish what he starts.
A System Frozen in 1991
Council tax still rests on valuations carried out in 1991, when average house prices sat at a tiny fraction of where they are now. Because of that, homes in Hartlepool fork out roughly thirteen times more tax relative to their value than similar-sized properties in Westminster.
The gap hasn’t shifted since John Major was in No 10, and campaigners point to it as the single strongest reason to scrap the whole thing.
Unpaid council tax has now reached £8.3 billion, a figure that reformers say proves the bands have stopped working. Burnham himself has called the tax “highly regressive” more than once, a line he’s been using since his days running Greater Manchester.
Two Options on the Table
Officials have confirmed that two ideas are being looked at seriously.
The first is the PPT. Homeowners would pay 0.48% of their property’s current value each year, and both council tax and stamp duty would go. The second is a land value tax, which charges only for the plot a home sits on, not the building itself.
Burnham raised both during an interview in which he pointed out that people in Greater Manchester often pay far more council tax than owners of much larger homes in London.
There’s a simpler third move. Ministers could lower the threshold for a mansion tax surcharge already planned for the priciest homes, from £2 million to £1.5 million. This wouldn’t touch the wider system but would raise more from the top end.
Opponents See a Southern Raid
The pushback has been swift. James Cleverly, the shadow housing secretary, accused Burnham of “looking for more ways to tax Middle England.” Even Lord Blunkett, an ally of the Prime Minister, has admitted a full land value tax would be politically fraught, though he backed bolder thinking on the economy more broadly.
The biggest objection centres on households that own valuable homes but live on modest incomes. Critics warn that a switch to current values could mean punishing annual bills for older owners who bought their houses decades ago, long before anyone dreamt of today’s prices.
Winners, Losers and a Slow Timetable
Tie the tax to a home’s present-day worth and most of the North and the Midlands would pay less. London and the South East, where values have shot up since 1991, would pay more.
Both the PPT and the land value tax push the burden in that same direction: lighter up north, heavier down south. Lowering the mansion tax threshold by itself would raise extra cash from the South but would do little for northern bills.
Burnham has stressed he’ll stick to Labour’s fiscal rules and move cautiously, describing his approach as prudent. Even supporters inside government say a full replacement could take years. Revaluing every home in the country is a colossal job, and homeowners who face steep rises are bound to fight it loudly.
A Correction, Not a Raid
Council tax was never meant to go thirty-five years without a revaluation. That it has done so says more about political nerves than sound public finance.
Burnham’s proposals tackle a problem that has built up year after year, shifting the tax burden towards the parts of the country where property wealth has grown fastest since the last valuation. Calling the plan a raid on the rich misses a simpler truth: for years, owners in London and the South East have been paying less than their share.
In practice, the change will probably come in stages, spread across several budgets. A lower mansion tax threshold looks the likeliest opening move, with a fuller PPT or land value tax kept alive as options for later in the parliament.
Whatever route Burnham takes, the case for updating a tax frozen in 1991 has grown too loud for any government to ignore for another three decades.
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