Proposals for a Proportional Property Tax

Dear constituent,

Thank you for contacting me about the Fairer Share campaign for a proportional property tax. I note the arguments that the Fairer Share campaign makes for its proposals and the issues it highlights with council tax and stamp duty.

I appreciate, for example, that council tax is effectively regressive, affecting families on lower incomes more while higher earners pay less. Council tax has also increased significantly in recent years as central Government funding for local authorities and the vital services they provide has been drastically cut.

It is particularly worrying that the Government all but forced local councils to increase council tax by 5% to meet a funding gap caused by the coronavirus pandemic. Furthermore, it expects them to increase it again to fix holes in social care funding – despite the coming increase in National Insurance contributions, which was announced as part of a plan to fix social care but will not provide any funding towards it.

I believe the Government needs to look in depth at local government finance, including property taxes such as council tax, and taking account of the full impact of COVID-19. We must provide certainty and stability for the provision of local public services by properly funding local government rather than simply increasing the burden on working people.

The Government has said it does not have any plans to introduce a new proportional property tax and that residential properties will continue to be taxed through stamp duty and council tax. It also has no current plans for a revaluation of council tax bands and has stated it does not have any long-term plans to change the amount of stamp duty on property purchases. Nevertheless, I can assure you that I will keep in mind the points you raise as I consider issues related to property taxes when they arise in Parliament. I believe our tax system must be fairer, ensuring that the burden does not just fall on the wages of working people, but that those at the top pay their fair share too.

Thank you once again for contacting me about this issue.

Yours Sincerely,

Peter Dowd MP