Property tax should be based on ability to pay says Kirk

Richard Frazer
Dr Richard Frazer

The Church of Scotland has called for Council Tax bands to be re-evaluated to make it a fairer system that reflects current house prices.

Members of the Church and Society Council said the move was “the least” the Scottish Government could do but called for a wider political debate, including the merits of replacing it with a Land Value Tax.

The call comes as Communities Secretary Angela Constance unveiled the Scottish Government’s Fairer Scotland Action Plan in Glasgow today.

A £29 million programme with 50 points of action is being established for communities and the third sector to design, test and deliver new approaches to tackling poverty and improving lives.

Reimagine

Rev Dr Richard Frazer, convener of the Church and Society Council, said: “The current Council Tax system no longer works for many people living in Scotland.

“It has been shown that it is inherently unfair - with those on lower incomes hit hard, and those who can afford to pay more, paying less.

“It is time to reimagine the Council Tax as a key way for the Scottish Government to deliver social, environmental and economic policy that would benefit the people of Scotland for many years to come.

“We would urge the Scottish Government to consider the possibilities that could be created as a result of this rethink.”

The Church’s position has been set out in a submission to the Scottish Parliament’s Local Government and Communities Committee which is scrutinising Scottish Government proposals to reform Council Tax.

It said that the Council Tax freeze has had a hugely unfair impact on public services delivered by local authorities and cuts have “hurt many of the poorest in our society the hardest”.

The submission stated: “We appreciate that the proposals do include a lifting of the Council Tax freeze and we welcome this move.

“However, the proposals as a whole do not enable greater autonomy for local authorities to connect directly with Council Tax payers and agree mutually acceptable levels of taxation and service provision.

“Nor do the proposals represent a more progressive taxation system that the Church has consistently advocated, most recently in our report to the Church of Scotland General Assembly in 2015.”

Fairer system

The Church and Society Council’s submission pointed out that the Commission on Local Tax Reform which was set up by the Scottish Government in 2015, highlighted that people in the most expensive homes “pay no more than three times the tax on the lowest value homes, even though we estimate those homes, on average, are now worth around 15 times as much”.

The Commission on Local Tax Reform stated: “That means people in less expensive homes are paying a higher proportion of their property’s value in Council Tax than those in the most expensive homes.”

The Church and Society Council submission continued: “This proposal to change Council Tax bills in the upper bands without addressing the underlying problems with valuation does very little to make the Council Tax a fairer system.

“At the very least a revaluation is required to ensure that Council Tax bills reflect current house values and that the difference between the lowest and highest Council Tax bills is a fairer reflection of the differences in house prices.”

The Church and Society Council said that in order to bring about greater equality, transparency and a clearer relationship between the Scottish Government, Scottish Parliament and local government, the system of Council Tax should not remain a long term option.

“We would support a wider political discussion on the alternatives to Council Tax, including a Land Value Tax,” said the submission.