Britain levies the highest property taxes of any OECD country relative to GDP. Because land supply is fixed, taxing property should not reduce consumption or production, unlike taxing sales and income. Land is also immovable, meaning property taxes avoid the flight risks that wider wealth taxes bring.
Council tax is an annual levy that raised £41bn in England in 2024-25 to fund local services such as social care and bin collection. Charges vary by local authority, with houses allocated to one of eight bands, A to H, according to their market value in 1991. Even back then, the system favoured richer homeowners: band H homes were worth over eight times more than band A ones but paid only three times the tax. Band H is an enormous category, running from large but middle-class homes (worth £1.5m or more in today's values) to Buckingham Palace.
Since 1991 diverging house prices and the unequal financial fortunes of councils have made things worse. The owner of a two-bed flat in Hartlepool pays more council tax per year (band C, £2,218) than someone with a ten-bed mansion in Westminster (band H, £2,034).
Stamp duty is a transaction tax paid whenever a house changes hands. It raised £15bn in 2024-25. At over £40,000 on a £1m home, it makes moving very expensive, resulting in fewer transactions. Because people often move to take higher-paying jobs, inhibiting such moves means less-productive workers, undermining growth.
Think-tanks across the political spectrum have backed replacing council tax and stamp duty with an annual levy calculated as a percentage of a property's up-to-date value. Places like America and Denmark have versions of such a tax. Research by the Institute for Fiscal Studies has shown that replacing council tax with a single proportional property tax would have far more winners than losers, with 10m households gaining over £200 annually. However, the richest 10% would see their bills rise by £750 per year on average—disproportionately older and southern voters who would be louder than the silent winning majority.
Political history is far too criminal a subject to be a fit thing to teach children.