Council tax bands are currently based on decades-old valuations (Image: GETTY)
Council tax bands in England should be overhauled to make them fairer, a group representing northern businesses has said.
The Northern Powerhouse Partnership (NPP) is urging Chancellor Jeremy Hunt to commit to a revaluation of decades-old property values which bands are based on in his March Budget.
The group pointed to research by the Fairer Share campaign that someone living in a house worth ￡150,000 in Hartlepool is paying ￡200 a year more council tax than a homeowner in an ￡8 million property in Westminster.
NPP chief executive Henri Murison warned the current system is "essentially broken".
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Mr Murison told the BBC: "At the moment you could be living in a house worth twice as much, just down the road from someone and be paying less council tax.
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"And that's not really fair on the person down the road, is it? And that could be solved relatively easily and quickly as long as the revaluation work had been done."
The group, launched by former chancellor George Osborne, insisted the move would help bolster the finances of local authorities.
Council tax bands are currently based on a property's value in 1991 in England and Scotland, 2003 in Wales and 2005 in Northern Ireland.
The NPP has also called for additional council tax bands to be created for foreign-owned properties worth more than ￡2 million as part of further reform.
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It comes as the local government finances are in crisis with one in five councils likely to issue a section 114 notice meaning it cannot make new spending commitments over the next year, according to the Local Government Association.
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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