The recent tax devolution campaign launched by the Mayor of London, Boris Johnson, London’s borough councils and England’s biggest cities argues that property taxes such as council tax, stamp duty, business rates and land tax should be managed by cities and boroughs themselves, and makes the case for new powers to raise new, smaller taxes.

Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield make up the Core Cities group, which, along with London Councils (representing the City of London and the city’s 32 borough councils) say the move would generate “stable and continuous” funds which would be used to stimulate economic growth. Local needs would be better met, and the change would tie in with the government’s support for “radical devolution”.

Central to the campaign is a report for the London Finance Commission by Professor Tony Travers. The report argues that cities could become finically self-sufficient, broadening the tax base, and, in the long term, reducing demand on public services.

Travers’ Raising the Capital report suggests that all aspects of property tax management should be undertaken by the applicable London authority, inclusive of banding, discounts, re-valuation and tax breaks for commercial properties. The suggestion of a referendum was also floated with a view to challenging excessively high business rates.

Exactly how the new powers would work will no doubt be of great interest to our landlord and buy to let insurance customers, since such new powers would affect banding, discounts and tax breaks – amongst other areas. The question of whether or not property owners would be better off under a locally-administered property tax system remains to be answered.

Commenting on the proposals, Johnson highlighted Scottish and Welsh devolution, and the fact that English regions have so far not been awarded the same autonomy. He said the proposals were “a partial but positive and practical answer to the conundrum about English devolution”. blog keeps you informed of property related news and stories.

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