Millions of households across Britain could soon see their council tax bills reduced under a radical new proposal designed to rebalance the system and ease the cost of living for the majority.
The Fairer Council Tax Proposal
A think tank with significant government influence, the Institute for Public Policy Research (IPPR), has put forward a plan that would fundamentally alter how council tax is calculated. The core of the proposal involves slashing bills for properties in the lower Bands A to D, which account for roughly 80% of all UK homes.
To facilitate these cuts for the majority, the IPPR suggests implementing significant increases for those in the highest property bands. The most dramatic change would see owners of Band H homes—typically valued at over £1.5 million—facing a 100% hike, effectively doubling their council tax bill. Properties in Bands F and G would also see higher contributions, with a proposed 50% increase.
Addressing a System "Past Its Sell-By Date"
The think tank argues that the current council tax structure is deeply unfair. It highlights a striking disparity where an average resident in an affluent area like Kensington pays less council tax than someone living in a more modest home in Blackpool, despite the vast difference in property values.
Aditi Sriram, an economist at IPPR and the lead author of the report, stated unequivocally: “The current council tax system is unfair, inefficient, and long past its sell-by date. Our proposal cuts bills for the vast majority of households while asking those with the greatest property wealth to pay a fairer share.”
This reshuffling of contributions is projected to raise nearly £4 billion for local councils. Of this sum, approximately £1 billion would be directly reinvested to reduce the financial burden on those in smaller, more affordable homes, offering an estimated average saving of £45 per year for most households.
Broader Reforms and Immediate Impact
The proposed changes are not limited to domestic council tax bands. The IPPR has also recommended increasing the extra tax on foreign buyers of UK properties from the current 2% to 6%, a move intended to discourage property speculation.
Looking further ahead, the organisation is calling for a full review of council tax by the end of the current Parliament. This could pave the way for a more comprehensive and fairer property tax system in the long term.
Carsten Jung, associate director for economic policy at IPPR, emphasised the immediate benefits for struggling families. He said these changes could help millions of people save money straight away, particularly in less well-off areas, while simultaneously creating a more equitable system. “This is exactly the kind of policy we should expect from a Government relentlessly focused on reducing the cost of living,” he added.
If adopted, this plan would represent one of the most significant overhauls of council tax in decades, directly putting money back into the pockets of most UK households while requiring a greater contribution from the owners of the most valuable properties.
