There are suggestions from Scotland of abolishing Council Tax and imposing Local Income Tax (LIT). This would break the link between property values and tax amounts. Who will be the winners and losers? Low earning renters and owners might gain, especially if they lived in a high-band house. Two average earners co-owning a low-band house would probably pay more. Would tax be redirected to the local Council where a person lived, rather than one in the location of their work base?
With the likelihood of many anomalies the fairest way is to reverse the idea and precisely target property values with charge an annual Land Rent based on the value of the land on which the house sits (otherwise known as: Land Value Tax). If low earners cannot afford to pay now, arrangements could be made to defer some of the payments until the house is sold.
‘Land Rent’ is a probably a better term than ‘Land Value Tax’ as ‘rent’ implies a payment for a benefit received whereas ‘tax’ implies an arbitrary imposition by a government needing funds.
The Free Lunch-Fairness with Freedom examines the options for such a land rent (LVT) and suggests ways of coping with anomalies.