The opportunity for land and property taxes in Scotland: working paper for the Commission on Local Tax Reform

Publication type

Book Chapter


David Comerford

Publication date

Series Number

NO. 9


This paper lays out the effciency advantages of land and property taxation over other tax instruments, but also discusses the political economy barriers to a large scale change in tax policy towards such taxes. Widespread dissatisfaction with the Council Tax and an apparent openness on the part of the Scottish Government to consider reform of local taxation, presents an opportunity for small steps in the direction of land and property taxes. We evaluate the impact, in terms of the rates required, the distributional changes induced, and the potential constituency that should be in favour, of a revenue neutral switch in taxes. This is conducted in a static, microsimulation framework, with no impacts upon house prices or upon economic activity, which is appropriate for such a small change. The conclusion reached is that such a change is progressive in that it narrows the net equivalised household income distribution, and that the property tax rate required for a revenue neutral change, approximately 0:7%, is such that there are more winners than losers.


Public Policy, Government, Microsimulation and Taxation