The Proportional Property Tax

Fairer Share's Proportional Property Tax (PPT) would abolish Council Tax and Stamp Duty Land Tax on primary residences, replacing both with a single annual charge of 0.48% of a property's current value, paid by owners rather than occupiers.² Second homes, empty homes, and homes owned by non-residents would pay double, at 0.96%.

The design, costed for Fairer Share by WPI Economics, was revenue-neutral on 2019 figures: PPT revenue of £36.7bn recoups Council Tax (£31.9bn), SDLT on primary dwellings (£4.2bn) and £0.6bn of smaller adjustments.³ Two protections apply: no household would pay more than £100 a month extra on their primary residence at the point of transition (this ends when the property is sold), and those unable to pay can defer until sale.

Fairer Share's plan, and the modelling on this page, covers England. Council Tax and transaction taxes are devolved in Wales, which has its own bands (including Band I), a 2003 revaluation, and Land Transaction Tax in place of SDLT.

For every property in our valuation sample we compare two numbers: the Council Tax bill it attracts today (its own council's average rate for its band⁴) and 0.48% of its estimated current value. Scaled to England's dwelling stock,⁵ 82% of dwellings would pay less under PPT, around 20.5 million homes.

Fairer Share claims 77% of households would pay less.² The measures differ: we compare bills dwelling by dwelling, while Fairer Share counts households, including renters, who would pay no property tax at all. On our narrower dwelling-level test the claim holds up; if anything it is conservative.

The distribution matters more than the headline. Most winners gain a few hundred pounds a year; the losers at the top of the London market face increases of many thousands.

Council Tax bills based on 1991 values bear little relationship to what homes are worth today, and the gap is regional. Since 1991, prices in London have risen far faster than in the North, yet bills have not followed: the average Band D household in the North East pays £362 a year more than its counterpart in London, on a home worth barely more than half as much (£297,315 against £537,895 on our estimates).

PPT unwinds that. The average dwelling in the North East would save £1,093 a year; the average London dwelling would pay £1,024 more. 99% of dwellings in the North East win; 37% of London dwellings do.

The table below is the heart of this analysis: the average change in annual bill for every region and Council Tax band combination. Read it as a map of the politics. Outside London, every band from A to E pays less on average, and Band F pays more only in the East and South East. The pain concentrates in the top-right corner: Band G pays more everywhere except the North East, and Band H pays more everywhere, even in the North East. In London the average dwelling pays more in every band except B, though most Band A and B dwellings still win.

Band H is where the current system's cap bites hardest today, and where its removal bites hardest tomorrow. A Band H bill is fixed at twice Band D regardless of whether the home is worth £1m or £20m. Under PPT, the average London Band H home (worth £4.5m on our estimates) would pay £21,551 a year against £3,346 today.

Cells show the average change in annual bill (PPT minus Council Tax) for dwellings in each region and band. Green: pays less. Orange and red: pays more. Cells with fewer than 30 sampled properties are omitted.

Fairer Share's transitional protection caps any household's increase at £100 a month, or £1,200 a year. On our estimates, 1.4 million dwellings (5.5% of England's stock) face increases above the cap and would rely on this protection. In London that rises to 23% of dwellings; for London Bands G and H it is 81% and 98%.

The protection ends when the property is sold. That is deliberate; the buyer of an expensive home has just been spared six figures of Stamp Duty, so paying full PPT is the quid pro quo. But it has a side effect the campaign underplays: a capped household's bill jumps to the full rate the moment it moves. A London Band H owner paying £4,546 under the cap would trigger the full £21,551 liability for their buyer, and face full PPT on whatever they buy next. At the small, high-value end of the market where increases are largest, the cap re-creates the very lock-in effect that abolishing Stamp Duty is supposed to cure.

A time-limited taper, with the cap rising each year for a decade regardless of sale, would cost some revenue but avoid building a moving penalty into the system's foundations.

Weighting each council's bands by its own dwelling stock produces a league table of local impact. The biggest average savings are in low-value, high-rate authorities across the North and Midlands; the biggest increases are in inner London, where values are highest and Council Tax rates are among the lowest in England.

London boroughs account for 9 of the ten largest average increases, led by Kensington and Chelsea at +£7,032 a year on an average dwelling value of £1.93m. The largest savings are in Hartlepool (−£1,321 a year on an average value of £140,922) and a cluster of authorities across the North East and North West where high Band D rates meet low property values.

Whether a household wins or loses comes down to one comparison: is the home worth more or less than its current Council Tax bill divided by 0.48%? A £2,000 bill breaks even at £417,000; anything cheaper saves money, anything more expensive pays more.

Break-even is the property value at which 0.48% equals the average Council Tax bill for the band. Local rates vary, so the true break-even point in a low-tax London borough is well below these national averages.

Fairer Share set the 0.48% rate to be revenue-neutral against Council Tax (£31.9bn), SDLT on primary dwellings (£4.2bn) and minor adjustments, on 2019 revenues and valuations.³ Both sides of that equation have moved since, and not in the plan's favour: Council Tax requirements have risen roughly 38% since 2019, faster than property values, and main-residence SDLT raised nearer £5bn than £4.2bn in 2024–25. The rate needs recalibrating.

Against what councils actually bill (the £44.1bn requirement, plus replaced SDLT), 0.48% falls about £3.6bn short; the neutral rate is roughly 0.52%. On a stricter like-for-like basis (full-rate liabilities on both sides, no discounts), gross Council Tax on our modelled stock is £53.3bn and the neutral rate rises to 0.62%.

The gap between those two neutral rates is itself revealing. Councils bill £9bn a year less than full rates imply, mostly through the 25% single-person discount and Council Tax Support. PPT as designed has neither; its arithmetic works partly by charging full freight on dwellings that currently get a discount. That is a defensible policy choice (why should a property's tax depend on how many adults sleep in it?), but it means the effective increase for a single occupant is larger than the headline figures on this page suggest, and any support scheme bolted on later must be paid for by a higher rate.

Deferral and the £1,200 transitional cap would also suppress receipts in the early years; the 5.5% of dwellings above the cap account for a disproportionate share of the theoretical revenue. One factor works the other way: the 0.96% surcharge on second homes, empty homes and homes owned by non-residents is outside our modelling and would claw back some of the shortfall. None of this breaks the plan, but nobody should legislate expecting 0.48% to be the final number. On 2025–26 figures it is somewhere between 0.52% and 0.62%, and it will drift every year that Council Tax requirements outrun house prices.

Half of this reform is simply abolishing SDLT for home movers, and that half has the strongest evidence behind it. The Mirrlees Review called Stamp Duty "highly inefficient", a tax that stops properties being held by the people who value them most;⁷ the empirical literature consistently finds transaction taxes suppress mobility.

The full modelling, including revenue effects and the limitations of extrapolating the OBR's elasticities to complete abolition, is on our Stamp Duty reform page. The relevant point here: unlike Council Tax replacement, which reshuffles a fixed sum between households, removing the transaction tax creates genuine economic value. It is the part of the Fairer Share plan that any property tax reform should keep.

One caution cuts the other way. For a mover into an expensive home, the SDLT saving is a one-off; the PPT increase recurs every year. A buyer of the average London Band G home (£1,557,544) saves £100,655 in SDLT but pays roughly £4,328 a year more; the Stamp Duty saving is exhausted after about 23 years. For most of the market the trade is clearly favourable; at the top it depends on how long you stay.

Property Tax Lab is independent and non-partisan; we do not endorse parties or campaigns. But the evidence supports the direction of this plan. Council Tax is regressive with respect to property value: on our figures, Band A households pay an average of 1.03% of their home's value in tax each year, Band H households 0.13%. Stamp Duty destroys value with every move it deters. A flat levy on current values with no transaction tax fixes both, and the pattern of winners (broad, modest, concentrated in the North and Midlands) against losers (few, large, concentrated in inner London) is the arithmetic of correcting a 35-year-old injustice, not a flaw.

Our reservations are about design, not direction:

• The sale-triggered cap. Transitional protection that vanishes on sale rebuilds a moving penalty at the top of the market. A time-based taper would be cleaner.
• Renters and incidence. Moving legal liability to owners does not settle who ultimately pays. In tight rental markets, some of the owner's PPT will pass through to rents; the claim that 8.7 million renting households are simply "removed from property tax" describes the legal position, not necessarily the economic one.
• Deferral is doing a lot of work. Asset-rich, cash-poor households (retired owners in appreciated homes) are the hardest political problem. Deferral until sale answers it on paper, but large deferred balances accruing against homes will need careful, trusted administration.
• Revenue volatility. A tax on market values moves with the market. Councils need stable revenue; the plan's split of national and local allocations, and its smoothing mechanisms, matter as much as the headline rate.
• Valuation is solvable but not free. Annual automated valuation of 25 million dwellings is within the current state of the art (see our guide to AVMs for tax), but it requires investment, transparency, and a workable appeals route before the first bill lands.

None of these is fatal; all are fixable in legislation. If the new government takes one message from our data, it should be this: the winners outnumber the losers roughly 5 to one, but the losers know exactly who they are. The plan's success will depend on whether the transition is designed for the 5.5% facing capped increases, not the 82% getting a tax cut.

This analysis uses the Property Tax Lab price and band data set: 1,235,007 English properties sold since 2023, each with a current value estimate and a matched Council Tax band, joined to its local authority. For each property we compare 0.48% of its estimated value against its own council's average Band D rate scaled by the statutory band ratio. Winner shares and averages are computed within each of the 72 region and band cells, then weighted to the VOA's dwelling counts per cell; this double stratification corrects for the fact that recently sold properties are not a random sample of the stock.

Caveats, in rough order of importance:

• Gross liability basis. Council Tax bills are modelled at full rates. Single-person discounts (25%), Council Tax Support, exemptions and premiums are not modelled on either side; Fairer Share's household-level winner shares are therefore not directly comparable to our dwelling-level ones.
• SDLT is 2019-vintage. The £4.2bn of replaced Stamp Duty is WPI's costing on 2019 receipts; main-residence SDLT raised nearer £5bn in 2024–25, so the revenue shortfall and neutral rates are slightly understated.
• Average Band D rates. We use each authority's average Band D including precepts, not parish-level variation.
• Within-cell selection. Recently sold properties may differ from unsold stock within a region and band cell; stratification removes the between-cell bias but not any residual within-cell bias.
• Scope. Bands A to H in England (100% of banded dwellings covered). The 0.96% surcharge on second homes, empty homes and homes owned by non-residents is not modelled; it would add revenue relative to our figures.
• Values move. Estimates reflect current prices; a 2029 implementation on 2028 values would shift every number here, though not the pattern.