Concerns with the council tax system
Several features of the council tax system suggest that it is in need of reform. Firstly, the current design
has lost nearly all link to value of the property for which it is collected. In the nearly 25 year time span
between when the estimated values were set and now, property values around England have shifted
drastically. While house prices have risen overall in the period, they have done so at different rates and
to a different extent from region to region.
Figure 4: Average house price in England, by region, indexed so that 1991=100
Source: ONS house price index, Cebr analysis
As shown inFigure 4 a
bove, the average house price in London, the region which has noted strongest
growth since 1991, has increased fourfold since the time council tax bands were set and properties
Secondly, with just eight bands currently in place, the council tax system is not particularly progressive.
At present, all properties are placed within one of the eight existing bands ranging from A to H. Band A is
the lowest and encompasses properties valued at up to £40,000. On the opposite end of the spectrum,
band H applies to those that occupy properties worth over £320,000, with no more detailed breakdown
available above that value.
Yorkshire & The Humber
© Centre for Economics and Business Research - Report Commissioned by Howard Cox for the FairHomeTax.UK Campaign