Call to overhaul council tax amid rising household bills

By the Editorial Team · Friday, October 23, 2026

Labour MPs have called on Chancellor John Healey and Prime Minister Andy Burnham to replace council tax and stamp duty with a proportional property tax in the upcoming Budget amid warnings that households could face steep increases in council tax bills over the next decade. Campaigners warn that without reform, up to six million low-band households could see bills rise by more than £900 annually, increasing financial pressure on lower-income families and risking widespread arrears.

Calls are mounting for a comprehensive reform of council tax in the upcoming Budget amid concerns that household bills could rise substantially over the next decade, particularly affecting lower-income families. Some Labour Members of Parliament have urged Chancellor John Healey and Prime Minister Andy Burnham to consider replacing both council tax and stamp duty with a proportional property tax calculated as a percentage of a home’s value.

Analysis presented by Fairer Share campaigners warns that six million households currently paying the lowest council tax band could face increases exceeding £900 annually, pushing their bills to around £2,500. Meanwhile, for more than four million households in the benchmark Band D category, annual bills could rise by approximately £1,360, reaching £3,750.

Andrew Dixon, founder of the campaign group, described the current system as a "ticking time bomb," cautioning that without reform, the projected steep increases could trigger widespread financial distress and arrears among homeowners. He advocated for a revenue-neutral, proportional property tax as a necessary first step to create a fairer tax structure and ease the financial burden on households.

Labour MP Luke Myer echoed these concerns, stating that council tax is "crying out for reform." He argued that many average households are paying a disproportionately higher share relative to their home's value compared to residents in more affluent areas. Labour backbencher Jonathan Brash added that wealthier homeowners have reaped significant gains from rising property prices, while the tax system has remained largely unchanged for decades, compounding inequality.

Critics have long argued that council tax is based on outdated property valuations, which fail to reflect current market conditions, leading to disparities in tax burdens. Proposed changes could notably impact homeowners in the South-East, where property values and tax demands are generally higher.

In response to the calls for reform, a government spokesman emphasised the challenges facing families amid rising living costs, partially driven by international conflicts. The government highlighted recent measures intended to provide relief, such as removing VAT from electricity bills, capping bus fares, and extending a 5 pence cut on fuel duty to help ease household expenses. However, no direct commitment to council tax reform was indicated.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.