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Government ducks Council Tax revalautions

There will be no revaluation of Council Tax bands in England during the current parliament, the coalition government has said. This looks like cowardice but we should welcome the news nevertheless. Council Tax is a badly conceived property tax and investment in a revaluation would have simply provided another excuse for avoiding the real reform that is needed.

Nevertheless, a few minimal changes could usefully be made as a short-term fix. Properties in top band H are subject to only three times the tax charged on properties in band A, even though band H properties are worth six times as much. This is regressive. A ratio of 4:1 or higher would be more reasonable and raise useful extra revenue from those who can most afford it.

The single occupancy relief also makes no sense. It is a disincentive to letting, and opens up an opportunity for fraud, leading to enforcement costs. It is also the case that in many local authority areas with a large proportion of single person households, the effect is that the standard rate of Council Tax is higher than it would be if the discount was abolished. The Campaign’s own view on property taxation are set out elsewhere on this web site.

We are currently having a re-think on the balance of funding for local government – how much should be raised locally, how much should be raised nationally and what should be paid for directly? We have floated the idea of a capitation payment as a possible solution. We would like to hear your views on this.

Link to Guardian article