Could Council Tax Be Replaced by a Property Tax? Here's What We Know

Reports over the weekend suggested the Government was considering major reforms to the way homes are taxed, including replacing Council Tax and Stamp Duty with a new annual property tax.

One proposal, backed by campaign group Fairer Share, would replace both taxes with an annual charge equal to 0.48% of a property's current market value. Under the proposal, second homes, empty properties and some overseas-owned homes would pay 0.96%. A home worth £250,000 would pay around £1,200 a year. Supporters argue the change would create a fairer system because Council Tax in England is still based on 1991 property valuations.

However, no changes have been announced.

On Monday, Prime Minister Andy Burnham dismissed reports that the Government was actively planning to replace Council Tax or Stamp Duty. A Downing Street spokesperson said suggestions the proposals were under "active consideration" were "not true", adding that any decisions on taxation would only be announced at a future fiscal event, such as the Autumn Budget. Burnham also ruled out making any changes to Stamp Duty in the upcoming Budget.

Although Burnham has previously described Council Tax as "highly regressive" and has said there are "big decisions" ahead on property taxation, he stressed that any future reforms would need to be consistent with Labour's election manifesto.

For homeowners, nothing changes today. Council Tax and Stamp Duty remain in place, and there are currently no confirmed government plans to replace either tax. While debate over property tax reform is likely to continue, any changes would require formal government proposals before they could become law.