The biased nature of the Council Tax System has long been a frustration to me. I do not like any system that operates with one rule for you and another for us.
The current range of council tax bands does not spread the burden of council tax fairly across society.
Council Tax paid by home owners whose properties are worth below ~£1m understand and accept the principal of banding. The same principal should be extended to properties valued all the way up to £100m and above.
The Lib Dem’s High Value Property Levy does this. It establishes graduated council tax bands for properties £2m and above. At last, the same set of rules for all home owners.
A bit of detail
The highest current council tax band is defined by its lower limit, i.e. property valued at £320,000 in 1991. This converts to ~£960,000 in today’s house prices (*see below for source).
While owners of properties valued below this level pay council tax in increasing increments across eight council tax bands, all properties valued above ~£960,000 are charged council tax at the same rate. Bands at the bottom of the council tax scale are extremely narrow. The lowest band spans only a valuation difference of £12,000.
As it is reasonable for people living in properties valued at £300,000 and £30,000 to pay different levels of council tax, so it is reasonable that council tax levied on property valued at £100m should be more than on property valued at £1m.
The Lyons Inquiry of 2007 recommended revaluation of properties and the redrafting of council tax bands to both reduce payments at the lower end, and increase payments for higher valued properties, yet no action was taken by the Labour government.
If elected to Westminster I would support the extension of Council Tax bands and this spreading of the burden. I would also call for government to get on with revaluing properties across the UK as soon as possible.
* Source: Nationwide Building Society data by broker Knight Frank, as reported in the Independent, Oct 2012: ind.pn/TM27XC