Scotland staring in the face of a £400 million budget black hole
The Scottish Labour Party has been warned by the Scottish Conservative party that plans to introduce a property tax in place of the current council tax system in Scotland could result in a £400 million budget shortfall. It is no surprise, after yesterday's revelations in The Times newspaper, that the UK government is now looking towards scrapping council tax and charging households an individual tax based upon the value of their property. This is a system which the government has been trying to bring in for some time and even though Gordon Brown seems adamant it will happen this time, there will be tough battles ahead. Is this the Labour Party's equivalent of the Conservative poll tax?
The idea is that council taxes will be abolished and taxes charged on the value of an individual's home, which will take into account regular valuations and will also mean those who improve their homes will be charged more. Quite what this will do for the UK property market in the medium to longer term remains to be seen because ultimately if taxes continue to rise, in line with property values, many homeowners will be left short changed.
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