Labour's Kezia Dugdale unveils plan to abolish council tax

Could it wheelie work? Kezia Dugdale says yes. Picture: Scott Taylor

She claimed 80 per cent of households would pay less under the new system, but it would mean a revaluation and critics said homeowners in Edinburgh would be hit harder than people elsewhere because of the city’s high house prices.

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For properties worth £180,000 or less, the tax would be levied at a rate of £450 plus 0.35 per cent of the property value. For properties over £180,000 the portion above £180,000 would attract a rate of 0.9 per cent of property value.

Bills would be capped at £3000 in year one, with a three per cent limit on increases year on year.

Labour said its new “fair property tax” would see bills for residents of a house worth £60,000 fall by £106 from the average council tax band A levy. But people living in a house worth £360,000 would pay £450 more than the current £2250 band G levy.

It would be up to councils to decide whether to levy a “tourist tax” on hotel rooms of up to £2 per night and a tax on large patches of vacant land.

Ms Dugdale said: “Labour will abolish the unfair council tax and leave nearly two million households better off.

“Labour will make good on the SNP’s broken promise and scrap the council tax. We will fix the funding of local services for good.

“The SNP commissioned a report into replacing council tax and then bottled it when it was time to be radical. We have taken that report, and its research, and voters can now choose a fairer alternative to council tax.”

Lothian Labour MSP Sarah Boyack said the tourist tax plan was good news for Edinburgh.

She said: “Major cities around the world have these powers and it enables them to invest in the attractiveness and quality of their culture and tourism offers. Local authorities across Scotland including Edinburgh have called for this power to be devolved for a number of years.

“Due to the unprecedented budget pressures the city council is facing, it is simply not in a position to make the investment necessary. It needs to find additional sources of revenue. If it doesn’t there is a real risk that we will face a tourist slump which will hurt the Capital’s economy.”

Scottish Tory leader Ruth Davidson accused Labour of wanting to “tax Scotland back to the 1970s with a new property tax”.

She said: “This only confirms Scottish Labour has become the enemy of aspiration.”

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