Bills for the wealthiest households would increase ten times faster than for those in more modest properties under SNP proposals to increase the tax rate for the top four council tax bands and boost support for low-income families, the Resolution Foundation estimated.
Exact cash consequences are hard to predict, because the SNP plans to replace the nine-year council tax freeze with a cap on increases, but the think-tank expects average bills for top band payers to rise by about £125 per annum, and for the wealthiest 10% of households to pay for more than half the extra £100m in revenues that the reforms are expected to generate.
The party's proposal disregarded the recommendations of the Scottish Government backed Commission on Local Tax Reform, which called for the council tax to be replaced with a new levy.
Labour, the Liberal Democrats and the Greens were all represented, along with the SNP and independent experts, on the commission last year. However, to much surprise, first minister Nicola Sturgeon instead opted to keep the tax and the 25-year-old property valuations on which it is based, and change the upper band rates.
Adam Corlett, an economic analyst at the Resolution Foundation and author of the report, acknowledges that the different property-based formulae proposed by Labour and the Greens would also be redistributive, while the Conservatives and Liberal Democrats have yet to publish detailed plans.
“Unlike the SNP, Labour’s approach is designed to be cost neutral and the majority of households would receive small tax cuts.
“The Green Party’s plan would raise more revenue while also producing more losers,” he added. “Both would undertake a welcome revaluation of property values, with estimates suggesting that the continued use of valuations from 1991 has left the majority of households in the wrong council tax band.”
Given Wales’s extra council tax band and Northern Ireland’s rates system, Corlett highlighted that reform in Scotland would leave England with the UK’s most regressive structure of local property taxation.
