House prices and local taxes in the UK

In this paper, estimates of the effects of local domestic property taxes (rates) on local house prices are presented, and the effect of local taxes on owner-occupied dwelling prices is calculated for a number of English cities for the period up to 1990. The methods used enable estimation to be made of the effect of the introduction, during 1990, of the Community Charge or poll tax in England, when the local tax base was moved from housing consumption onto individual residency. It is estimated that the reform could have increased house prices by around 15 per cent and contributed substantially to house price inflation.