For a two-bedroom flat near Canary Wharf, last bought for £380,000 in May 2024, the current Band D council tax bill is £1,837.
Despite being in central London, this inner-city flat pays less in council tax than the Exmouth bungalow.
Under a 0.48pc proportional property tax, the Canary Wharf home would pay £2,064, based on an updated valuation of £430,000.
But what happens under a land value tax is less clear. A 0.4pc land value tax bill would mean a £4,678 bill for the plot of land that the flat is on.
However, the Canary Wharf flat is a leasehold, so the owner doesn’t own the land their property is on. Instead, they have a right to use the land for a set period, as set out in their lease. There are also other flats on the same plot of land.
This means that, crucially, the actual bill would depend on whether any land value tax is split between leasehold flats in the same block.
If so, a flat owner could end up paying much less. If there are eight flats in the block, and the bill were divided equally, this could end up being just £584.75 a year. This is a saving of more than £1,200 a year compared to the current council tax bill.
But while flat owners might benefit from living in a block, other Londoners would not.
Modelling by Tax Policy Associates suggests that under a land value tax of 1.28pc – which it said was the rate required to replace council tax and stamp duty revenues – a £550,000 home in Kensington would pay £4,000 more than it pays now in council tax. Houses in the top Band H council tax band would face an annual charge of £53,000.
A government spokesman said rumours of the removal of stamp duty and council tax were “not true”, and added: “As has always been the case, tax decisions are a matter for the Chancellor to set out at fiscal events.”
