Revaluation and reform: bringing council tax into the 21st century

This is part of a wider project, also funded by the Welsh Government and the IFS’ Local Government Finance and Devolution Consortium. It aims to evaluate different options for potential council tax reform in England and Wales by carrying out statistical simulations using administrative and household survey data.

Complementing funding by the Welsh Government looking at council tax in Wales, the Nuffield Foundation-funded aspect of this work is focusing on England. While it is not currently government policy in England to revalue or reform council tax, there is widespread recognition that revaluation is overdue and more significant reform worthy of consideration, given that assessed property values have not been updated since 1991 and, as property prices have changed, council tax liabilities have become increasingly arbitrary.

The English research is also timely given reviews of local government finance reform and UK tax and spending policy, as well as continuing concerns about wealth and intergenerational inequalities, especially with respect to housing. A broader evidence review will situate the quantitative findings in the context of these policy debates.

Using data from the Land Registry Price Paid dataset, the Energy Performance Certificate database and Understanding Society the analysis will be shaped around the following key research questions:

• How have absolute and relative house prices changed in different areas and for different types of household since 1991?
• Given house price changes, how would revaluation of council tax affect different households’ incomes and wealth, and different councils’ tax bases?
• How would different potential reforms of the existing banded structure ‘ alongside a revaluation ‘ affect different households and councils?
• How would the results of the revaluation and reform options be affected if house prices changed in response to the reforms?
• How sensitive are the estimates to methodological choices, such as which property or local area characteristics are used in the statistical models?