Dear Constituent,
Thank you for contacting me about council tax and the proposal by Fairer Share to impose a new house price tax on homes.
Council tax is a local charge for the use of local services. The current banding system reflects that larger homes make slightly greater use of local services, but intentionally, it is not a poll tax nor a wealth tax.
Over the past decade, the Government has ensured that local taxpayers are able to veto excessive council tax increases by way of a local referendum. In addition, to support the most vulnerable every local authority is required to have a council tax support scheme in place.
Under this proposal, many hard-working families and pensioners would see soaring bills, both within local authorities and across the country. In particular:
- The existing single person discount would be abolished, hitting widows and widowers the hardest. Such a house price tax fails to take into account that single person homes make reduced use of local services.
- Annual revaluations would mean home improvements would be taxed, punishing people for doing up their home. Under the council tax system, material improvements are only taken into account when the home is sold.
- There would be no limit on the increase in taxes. When house prices rise, it would be very easy for a government or council to use that increase to hike the overall tax take by stealth, as bills would be based on house prices.
The Government has stated it does not support such a policy and has criticised proposals for such house price taxes.
I hope this is helpful to clarify my position as to why I am not able to support this proposal.
Thank you again for taking the time to contact me.
Sincerely,
