A report prepared by the Scottish Trades Union Congress (STUC) for campaign group Tax Justice Scotland last week showed that a tax of 2% levied against those with assets worth £10 million or more could bring in £492m a year.

The research found that enough money could be generated from just the top 10 richest families in Scotland to lift 30,000 children out of poverty if this tax was implemented.

While campaigners are keen to see the UK Government bring in this wealth tax across the UK, Jamie Livingstone – head of Oxfam Scotland and a member of Tax Justice Scotland – claims Scots cannot simply wait for this to happen, and the Scottish Government must use its powers to tax property wealth and some of the “damaging behaviours” of the rich.  

Economist Emma Congreve, from Strathclyde University’s Fraser of Allander Institute, added that overhauling the Council Tax system is the most obvious way of taxing wealth in Scotland, while the revaluation of properties to pave the way for a new approach is “urgent”.

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She said it was “strange” that the system has not been reformed given its regressive set-up is “at odds” with a fairer approach to income tax in the country.

The Council Tax has long been regarded as unfair because of outdated property valuations that have not been updated since 1991 in England and Scotland, but a full revaluation has never been carried out.

Livingstone told the Sunday National: “The UK Government needs to get on and improve the quality of wealth taxes either by increasing and improving existing wealth taxes or by considering a new wealth tax which is hugely popular, not just among the public, but increasingly among wealthy people themselves.

“[But] we can’t simply wait and hope the UK Government will increase [taxes], we need to get on and use the tax powers that are available in Scotland.

“To be fair to the Scottish Government, it has made the income tax system fairer, but if we’re wanting to shift the focus to better taxing wealth, the main lever in Scotland to achieve that is improving the taxation of property wealth, and that takes you firmly to the Council Tax.

“Council Tax reform is long overdue. There’s been broad consensus, but there’s just been political stasis in driving that change.

“Everyone acknowledges it’s ludicrous, but it will take political leadership to fix it.”

Livingstone said he wants to see every political party in Scotland lay out its commitment to launching a revaluation and “going through the hard yards” to design a fairer system going forward.

(Image: PA)

Public Finance Minister Ivan McKee said a revaluation of properties is “absolutely needed” earlier this year, but the Scottish Government has not committed to carrying one out.

The banding proportions were changed in 2017 by the Scottish Government, with charges increased for bands E to H. However, as the entire system is based on outdated valuations, this move has long been viewed by experts as inadequate.

Congreve said given the Scottish Government had taken the risk of overhauling income tax, it is odd the Council Tax system has only been tinkered with.

Asked whether the Council Tax was the best way to tax wealth in Scotland, she said: “For anyone in Scotland interested in wealth taxation, Council Tax is absolutely the first place to start. Land is the next obvious place to go.”

Congreve said there was no technical issue standing in the Scottish Government’s way in terms of revaluation, but there has been a “lack of political will” to commit to the process.

She went on: “It’s very odd [Council Tax has not been reformed]. It seems there’s a bit of a difference between when new powers come in, so the new income tax powers for example, the Government has done something with those, but the existing taxes they had [at the start of devolution] – so Council Tax and non-domestic rates – they haven’t put in reforms to any great extent.

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“It’s not an easy decision for politicians to make, but they [the Scottish Government] did raise income tax and they were prepared to take that risk then, so it’s interesting with things like Council Tax, they talk much more about how there needs to be a consensus.

“It’s a strange position they are holding on [Council] Tax and it’s unclear exactly why that is.”

Congreve said the Scottish Government could also look at changes to the “very bad” Land and Buildings Transaction Tax (LBTT) – a levy that is applied when buying a new home – as part of Council Tax reforms.

“Essentially, you could just pay a recurring property tax on the value of your home and not face another tax when you buy a new home,” she said.

“There are worries that LBTT acts as a barrier to people buying and selling a home and that’s not a good thing if a tax changes behaviour like that.”

Livingstone is also keen to see the Scottish Government enact the Air Departure Tax – Scotland’s replacement for Air Passenger Duty – which was legislated for eight years ago but is still not in force.

Oxfam says there were more than 12,000 private flights in and out of Scottish airports in 2024 and that if an Air Departure Tax had been in place, and applied at the highest possible rate, that would have generated an extra £29m in tax revenue.

Concerns around exemptions for airports in the Highlands and Islands have so far stopped ministers from enacting the legislation.

On top of this, Livingstone said it is vital that a private jet tax is introduced by the Scottish Government as part of targeting behaviours of the wealthy that damage the climate.

He said: “We’ve been calling for air departure tax to be operationalised and, more than that, not just to introduce a new tax in Scotland and replicate the same banding and rates that exist within air passenger duty, but to introduce a specific new private jet tax within that.

“We know those jets cause hugely disproportionate climate emissions and yet, the Scottish Government says it is supportive of the ‘polluter pays’ principle, but it’s sitting on its hands and not operationalising the air departure tax.

“We’re missing out on revenues of up to £30m a year by our count, and we’re also effectively not tackling one of the most egregious examples of climate damage.”

A Scottish Government spokesperson said: “Any changes to council tax must be informed by robust evidence and wide public consultation – at present a consensus doesn’t exist on how to reform council tax. Our joint programme of engagement with COSLA on options for reform is intended to inform that public debate.

“The Scottish Government continues to explore all options for implementing Air Departure Tax in a way that protects Highlands and Islands connectivity while complying with subsidy control principles. Rates and bands – including those for private jets – will be set once this has been resolved and prior to implementation of the tax.”