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Mark Drakeford told to scrap council tax entirely rather than attempting to reform it

12 Jul 2022 3 minute read
First Minister of Wales Mark Drakeford. Picture by Andrew Matthews / PA Wire

Mark Drakeford has been urged not to waste a “once-in-a-generation” opportunity to overhaul the council tax system in Wales.

The Welsh Government put forward plans this week to make the system “fairer” by carrying out a revaluation of the country’s 1.5 million properties to ensure people are paying the right amount.

But charity Citizens Advice Cymru have argued the reforms “do not go far enough”, and that council tax should be scrapped entirely in favour of another type of levy, such as a land value tax.

Countries such as Denmark, Russia and Singapore which have adopted the land value tax charge landowners an amount based on the value of land without regard to buildings, personal property and other improvements

Both Welsh Labour and Plaid Cymru members, who entered into a co-operation agreement last year, have previously backed the idea of introducing such a tax.

“Council tax arrears are the most common debt issue we see at Citizens Advice across Wales,” Luke Young, the charity’s head of policy and campaigns, said.

“Bills are proportionately higher for low income households, and many people become trapped in debt.

“A fairer system of local taxation is the right thing to do.

“We need more than a revaluation of decades-old tax bands, as overdue as that is.

“A complete overhaul of this regressive and distortionary tax is possible, if politicians choose to do it,” he added.

“The Welsh Government must not miss this once-in-a-generation opportunity to transform Wales’ council tax system into a progressive tax based on ability to pay.”

‘Significant exercise’

The current proposals could see the creation of different bands with new tax rates chosen for each band.

The last revaluation was done almost 20 years ago in 2003, with the value of homes significantly increasing since then.

Despite this the Welsh Government has claimed an increase in your property’s worth would not necessarily lead to an increase in the amount households would be expected to pay in council tax.

They will also seek a change in the law to stop people being asked to pay their entire annual bill after they miss one monthly payment.

Minister for finance and Local Government, Rebecca Evans, said: “The reforms are not intended to raise more revenue from council taxpayers overall as, while some people could pay more, many others would pay less, and we will consider the need for transitional arrangements for any changes.

“We recognise this is a significant exercise and that we have a great deal of work to do before any changes can be introduced.”

Tory shadow minister Sam Rowlands said: “Ministers must consider the position of those on fixed incomes like pensioners and be mindful of individuals who may not have a significant income in proportion to their house value, especially with the recent movement in house prices.”

Council tax makes up around a fifth of council spending, helping to support local services such as schools, social care, policing, fire and rescue services, and road infrastructure.


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Mab Meirion
Mab Meirion
4 months ago

Consider those on a fixed income…what a novel idea…

hdavies15
hdavies15
4 months ago
Reply to  Mab Meirion

A flat rate pension starting say 10-15 years ago will be have a lot less purchasing power now. State pension is the only source of increases for many in that category. Whether this can be solved by some form of additional local tax rate is debatable but certainly an option.

Ernie The Smallholder
Ernie The Smallholder
4 months ago
Reply to  Mab Meirion

One way will be to abolish all UK taxation and for Wales to have local income tax and local corporation taxes based in real income actually received.
We can also have our own purchase (VAT) rate here.

If the UK wants Wales to stay in the union they will have to accept what the Welsh parliament votes to give them – that is a real federal union.

Doctor Trousers
4 months ago

Whether they reform or replace, it’s vitally important that they ensure safeguards for those who owned their homes before property values in their area were driven way up through gentrification/second home ownership.

George
George
4 months ago

Tory party in England: “if your home is too big for you, we’ll cap your benefits and push you towards debt.”

Tory party in Wales: “if your home is too big for you, we must support you so you don’t have to pay greater amount of tax to local council.”

Huh, it’s almost like they think home owners and pensioners are more likely to vote Tory or something.

Peter Cuthbert
Peter Cuthbert
4 months ago

There is a lot to be said for abandoning Council Tax and moving instead to a land value tax. Council tax has always been a regressive tax. There is more detail on how it works here: https://www.taxjustice.net/cms/upload/pdf/gen_ben_f_land_tax.pdf

Jon_S
Jon_S
4 months ago

The last rebanding exercise just resulted in most people paying higher Council Tax, regardless of ability to pay. This will just be another excuse for the government to raise taxes. The amount I paid for a house almost a quarter of a century ago in no way reflects my ability to pay now.

michael zalar
michael zalar
4 months ago

Council tax is a fraud, it’s an offer to pay, there’s no obligation to pay. Don’t take my word for it. Research it.

Mab Meirion
Mab Meirion
4 months ago
Reply to  michael zalar

Good luck with that, your not from Gwynedd I take it…

Erisian
Erisian
4 months ago

I think more detail on how such a Land Value Tax might work in practice would be helpful. The idea is entirely new to me but it sounds interesting. My immediate worry is how it might adversely affect people living in second ‘home’ hot-spots and and on the sort of ‘potential’ building plots that keep developers up at night grinding their nasty pointy teeth

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