A think tank has proposed scrapping Council Tax and stamp duty in favour of an annual property levy.
The Institute for Public Policy Research (IPPR) claims the council tax system favours wealthy homeowners as valuations were set 30 years ago and the charge hasn’t kept up with the rise in property prices.
It argues that replacing Council Tax and Stamp Duty with a charge on properties worth 0.5% would encourage homeowners to sell up if they live in a home that is too big for them and therefore create more housing stock.
The plans echo Labour’s doomed 2019 election manifesto plans for a mansion tax.
This charge would hit the wealthiest hardest as their bills would rise based on the value of their property but the IPPR says 75 per cent of homeowners would pay a lower tax charge.
The IPPR said: “A well designed property tax attaches an ongoing cost to the holding of property.
“It would therefore incentivise owners to ensure that their property is used efficiently, rather than, for example, leaving rooms empty in high-demand areas.
“This would increase the amount of housing space available to rent or buy, benefitting those who are currently struggling to afford decent housing.”