The chancellor Rishi Sunak is once again being urged to abolish stamp duty and replace it with a new levy. The think tank Bright Blue argues that scrapping the stamp duty holiday would stimulate greater activity in the housing market. It wants to see stamp duty abolished, along with council tax, and both replaced with an annual property tax instead.
The new annual proportional property tax (APPT) would seek to raise the same amount for the government as existing property taxes, but more closely reflect the value of homes than the current system that includes council tax valuations dating back to 1991.
Ryan Shorthouse, chief executive at Bright Blue, the think tank that published the report, said it would help to level up the UK by focusing taxes on the better-off. He commented: “The current property taxation system in England is regressive and distortive. It provides significant advantages to those who have – or are from families with – substantial wealth, and is quite punishing to those with relatively little. An APPT system would change that, making property tax liabilities much more manageable for those from modest backgrounds and areas.”
The new property tax, would charge the owner 0.11% of the property’s value each year for the central government, plus a local charge set by councils. The proposed levy would rise to 0.14% for second homes.