OECD economist proposes 'revolutionary' property tax

A TAX BASED on property to replace council tax and stamp duty has been proposed by a senior Organisation for Economic Co-operation and Development (OECD) economist.

In the August edition of Prospect magazine, Pier Carlo Padoan says that “a property tax based on market values” should be introduced. This would replace stamp duty, council tax and the value of property in inheritance tax and capital gains tax. Padoan says this would “dampen fluctuations in house prices”

However, Helen Demuth, tax director at accountants Smith & Williamson, told The Telegraph: “The idea of replacing council tax and SDLT with a new property value tax would represent a revolutionary shift in taxation.

“The implications of the changes would be enormous, not just the legislation needed, but consider the need to value every property when the plan to do this for council tax in England is now on the back-burner.”

Mike Warburton, tax director at Grant Thornton, told The Telegraph: “Applying a property tax based on market value to a UK population brought up to believe that their home is their castle would go down like a lead balloon. We do not have a history of taxing wealth in this country, preferring instead to tax income and capital gains. Many other countries in the European Union have wealth taxes but they are certainly not popular.”