The Joseph Rowntree Foundation has called for the current council tax system to be replaced with a national property charge, which it claims would be fairer.

In a report published on 5 March, the think-tank calls on the Government to start thinking about a long-term replacement for the current system and highlights the benefits of a progressive national property tax, which would take into account a household's ability to pay.

The report states London would need to have its own scheme, because house prices are higher in the capital than in the rest of the country.

Speaking to The MJ, report co-author Mark Stephens said there is a ‘growing acceptance that we need to tax property more sensibly' in this country.

‘Property tax is an area where politicians tread warily,' said Mr Stephens. ‘I think council tax is clearly reaching the end of its shelf life. If the alternative is to abolish all property taxation in the UK, then the Government will have to find over £20bn from another source. Our report shows that a national property tax would create far more gainers than it would losers.'

Mr Stephens said the current system is based on property values from 1991 and the current system is becoming ‘unsustainable' as the Government continues to encourage councils to freeze council tax levels.

Outside London, the report claims gross bills would fall by more than 10% for almost two thirds of households and less than a quarter (22%) would see bills rise by more than 10%.

The County Councils Network's finance spokesman, Cllr John Borrow, said any reform of council tax ‘must acknowledge the financial cliff edge our members face'.

‘We welcome this contribution to the debate and its particular focus on equitably ensuring the weight of taxation falls on those with the ability to pay,' said Cllr Borrow.

Separately, London Mayor Boris Johnson this week broke ranks with Conservative Party policy and voiced his support for a revaluation of council tax levels.

Giving evidence to the Commons Communities and Local Government Committee's inquiry on fiscal devolution on Monday, Mr Johnson said council tax payments could be lowered for many homeowners – were the first revaluation exercise since the levy's introduction in 1991 undertaken.

‘There's a reason this hasn't been done,' Mr Johnson told the MPs. ‘It's because it's very difficult and very unpopular. But that doesn't mean that it's not the right thing to do.'

Mr Johnson – who last May approved the findings of the London Finance Commission which recommended devolution of the full suite of property taxes within the capital – also gave his assent to the introduction of new bands for council tax.