Council tax should be scrapped and replaced with annual payment equivalent to 0.5% of homeowner’s property, says think-tank

• Labour-leaning think-tank suggests council tax should be replaced by annual levy
  The Institute for Public Policy Research called for a ‘proportional property tax’
  Under their system, someone living in a house worth £1million would pay £5,000

As well as replacing council tax, the new levy would also replace the stamp duty which people pay when they move house.

The think-tank said the move would lead to a fall in house prices of 3 per cent in London and other well-off places in the South.
Shreya Nanda, IPPR economist, said: ‘Those who did not own property during the long house price boom have been locked out, and too many face steep rents, cramped flats and eye-watering mortgages.
‘A proportional property tax would instead ensure that these gains were shared more fairly across society.’

A property tax of 0.5 per cent could mean three quarters of households in England paying less than what they do now.

Last night, a Treasury source said there were no plan to introduce such a property tax.