People in the North are paying about £250 more in council tax than those in more expensive homes in other parts of the country, according to an analysis by the Northern Powerhouse Partnership
The think tank, which advocates for the North of England, said someone living in home worth £150,000 in Hartlepool is paying more in council tax than an £8,000,000 home in Westminster.
The partnership is calling for council tax bands to be re-evaluated, and described the current situation as "unfair and outdated".
Henri Murison, of the Northern Powerhouse Partnership, said: ""The double challenge here is some councils like Westminster famously have some of the lowest council tax in the country and the people who live in those areas have also benefitted from their houses going up in value but them not being re-banded to catch up with the fact they are worth a lot more.
"So there's a northern tax bombshell, because we haven't revalued council tax for thirty years."
The partnership said a householder in Gateshead will see their council tax go up by more than £116 this year, compared to just over £45 in Westminster, which claims the lowest band D rate in the country.
How does council tax banding work?
There are eight council tax bands from Band A - the cheapest - to Band H - the most expensive.
Current bands are based on a property's value in 1991. A report by the Institute of Fiscal Studies in 2020 said official estimates suggest the average price in London is now more than six times what it was in 1995, compared with barely three times in the North East.
The same report found the most valuable properties in 1991 attract just three times as much tax as the least valuable properties, despite being worth at least eight times as much in 1991.
Councils with lower quality housing stock cannot raise as much through raising taxes as councils with larger and more expensive homes.
Martin Gannon, leader of Gateshead Council, said re-evaluation banding would result in some net winners and some net losers - but the net impact would be a similar amount of funding for local Government.
He said: "Reevaluating properties doesn't bring in more money - it just rearranges deck chairs on the Titanic. The problem is the lack of central Government support and the cuts in Government grant."
He added: "Council tax is rising year-on-year above inflation
A 1% rise in Gateshead raises less than £1m. If we were to put council tax up as the government is advocating, to compensate for the loss of government grant we would have to rise by 200%. Nobody in Gateshead can afford to pay a 200% rise in council tax."
The Government said it has no plans for a national wide evaluation of council tax bands, which it added would be expensive and could result in increased bills for many households.
A DLUHC spokesperson said: “Councils are ultimately responsible for their own finances and for setting their own council tax.
“We have no plans to conduct a nationwide revaluation of council tax bands.”
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