Outdated and Unfair: The Case for Council Tax Reform

 I have been working with the Tax Justice Scotland campaign on the case for Council Tax reform. This week, we have published a briefing that throws down the gauntlet to Scotland’s politicians, demanding they end decades of inaction and commit to replacing the unfair and outdated Council Tax in their 2026 election manifestos.

There is cross-party agreement that Council Tax is unfit for purpose, and a broad consensus amongst the policy community, supported by several reviews, on the solution. It is now a decade since the 2015 cross-party Commission on Local Tax Reform concluded that ‘the present Council Tax system must end.’ The problem is a lack of political will – moving implementation from the ‘too difficult’ tray. We are therefore calling for concrete manifesto commitments to:

• Abolish Council Tax and replace it with a fair, modern property tax.
• Launch a national revaluation of property as a first step in the next Parliament.
• Ensure the new system is local, proportional, and protects those on low or fixed incomes, while ensuring effective transition support is in place.

It is beyond absurd that properties are still valued for tax purposes as if it were 1991. I recall giving evidence to the Scottish Parliament Local Government Committee in the mid-2000s, pointing out that it was then 15 years since a valuation, and asking how much longer? 20, 25, 30 years? Well the answer was even more than that!  The uneven distribution of house price increases has also led to many properties with similar 1991 values having wildly different values in 2025. The Institute for Fiscal Studies says that over half of properties are in the wrong Council Tax band relative to where they would be if valuations were brought up to date. This has further entrenched the regressive nature of Council Tax, with the burden falling most heavily on people in less valuable properties. 

The consequences of the failure to reform can be seen in every community, with councils raising charges for services or cutting them entirely, which most negatively impacts those least able to afford them. The regressive and inflexible nature of Council Tax makes it difficult for councils to use it as an effective tool for funding public services. A prolonged period of nationally imposed Council Tax freezes in Scotland further restricted local councils’ already limited financial autonomy relative to comparable countries. Think of taxes like paying into a pot we all draw on: it’s how we keep our schools and libraries open, our care homes running, reduce the cost of public transport, and keep our streets safe. It’s about paying for the  foundations (the social infrastructure) that make our society one that we all want to live in.

The briefing explains why successive studies have agreed that a reformed property tax is the best solution. A reformed tax on property recognises that property is a major source of wealth in Scotland, but one that is glaringly unequal. That is particularly true on a generational basis, with rates of property ownership among younger generations much lower than among older ones, even at comparable points in their lives. Taxes on property are also more difficult to avoid or evade. A reformed property tax must be set locally and be based on a percentage of property value. It must be periodically reviewed and flexible to household circumstances. While it remains the most important local tax, action is also needed on business rates and other levies that could also make a significant contribution to funding essential local services.

We’ve had consultations, commissions and countless commitments, but little has changed. Decades of delay on Council Tax reform have deepened the crisis facing local services and locked in inequality. The 2026 election is the moment for Scotland’s leaders to move beyond words and commit to the fair, modern and proportionate tax system our communities deserve.