Britain’s property-based tax for funding local services is a travesty — unfair, arbitrary and regressive. Stamp duty, which is levied on real estate transactions, distorts the housing market and discourages people from moving. A radical overhaul that replaces these taxes, as the Labour government is reported to be considering, would be both long overdue and promise lasting economic benefits. It would also be politically perilous — though if nothing else, getting rid of stamp duty would at least avoid a repeat of the debacle that forced Deputy Prime Minister Angela Rayner to resign on Friday.
Council tax, as the local levy is known, is the more objectionable of the two. There is no conceivable justification for a system that imposes a higher burden on the inhabitants of a terraced house in Burnley, a deprived town in the northwest, than on a mansion in London’s Kensington and Chelsea, the UK’s richest borough. Remarkably, this is the reality not only for the tax as a percentage of property value (which is vastly lower for the most expensive homes) but in cash terms, too.
