Labour could stop renters paying council tax in major property laws shake-up

Posted On: 
4th June 2019

Renters would no longer have to pay council tax under radical plans being considered by the Labour Party.

The Labour-commissioned report calls on the party to intervene to cool the housing market if it wins power.
Credit: 
PA

The charge would be replaced with a new "progressive property tax" set nationally instead of by local councils and paid for by landlords instead.

Empty homes, second homes and those owned by people not resident in the UK for tax purposes would have to pay the new tax at a "significantly" higher rate.

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Ministers branded the move "extraordinary and deeply damaging" and warned that Labour's move amounted to a "tax bombshell".

The policy idea is contained in a new report which calls on Labour to make a string of "radical but practical changes in the way land in the UK is used and governed" if it wins the next election.

It says a Labour government should make public all information about land ownership and control, urges the Bank of England to do more to cool the housing market, and says new 'Public Development Corporations' should have the power to buy, develop and sell land "in the public interest".

The report meanwhile urges a major shake-up of the property tax system in a bid to "discourage the use of homes as financial assets, reduce the tax paid by the majority of households, and encourage more efficient use of the housing stock".

"We recommend that a Labour government replace the regressive and unpopular council tax with a progressive property tax based on contemporary property values," it says.

"Unlike council tax, this tax would be payable by owners, not tenants.

"This would result in significant administrative savings, lower levels of arrears and less court action.

"Unlike council tax, the progressive property tax rate would be based on regularly updated property values, and the rates would be set nationally, rather than locally determined."

'HAMMER FAMILIES'

The report was welcomed by Shadow Cabinet Office Minister Jon Trickett, who vowed to study its recommendations "in detail".

"For too long, people across the country have had little or no say over the decisions that affect their communities and the places in which they live," he said.

"So much of this can be traced back to the broken system of land ownership. Concentration of land in the hands of a few has led to unwanted developments, unaffordable house prices, financial crises and environmental degradation.

"Labour is committed to tackling these head on and delivering a fundamental shift in wealth and power from the few to the many."

But Housing Secretary James Brokenshire said the plans were "extraordinary and deeply damaging in equal measure".

He warned: "Labour will stop at nothing to hammer families with more tax and make home ownership a pipedream for future generations.

"Plans to seize land into public ownership also show Labour's true colours of more and more state control.

"This tax bombshell for families would mean family homes with gardens paying far more and higher taxes on pensioners by abolishing the single person discount."