Whoever forms the next government, they're going to have to do something about property taxesby Stephen Smith / May 5, 2015 / Leave a comment
Election campaigning can reveal more by what is left unsaid than by the pledges that are made. No serious strategy towards taxation is disclosed by the Conservatives’ pledges not to raise the rates of the main revenue-raising taxes; nor are all three major parties’ commitments to raising substantial extra revenues from a clampdown on tax evasion and avoidance a coherent and credible account of how future revenue needs will be met. Likewise, the campaign discussion of housing policy has thrown up soundbite promises—additional new housebuilding, promised help for first-time buyers, an extension of “right-to-buy” to housing association tenants—without giving a clear sense of how Britain’s deep-seated problems in the housing market will be addressed. One area which links the two areas of policy is property taxation, and the lack of long-term strategy is perhaps even more evident here than elsewhere.
Reform of council tax will be an urgent issue which any new government will need to address after 7th May. The tax was designed and implemented hastily in 1991 after the three-year poll tax fiasco. The house values on which the tax is based have been unchanged since its introduction, and are increasingly out-of-line with changes in the housing market in different parts of the country.
A revaluation will no doubt stir up a storm of protest from those who end up paying more, but it cannot be postponed indefinitely. There is no better time than the first year of a five-year parliament to tackle this issue, and if the chance is passed up now, we will surely still be paying council tax in 2020 on the basis of values that by then will be 30 years out of date.