It's a bit long-winded, but the conclusion is excellent

From the Institute for Fiscal Studies/Mirrlees review of UK taxation, Chapter 16:

16.4 Conclusions

The taxation of property [a term incorrectly used to refer to 'land and buildings'] in the UK is currently something of a mess. As we have seen when considering the practicalities involved in implementing an ideal system, up to a point that is understandable. But it remains both desirable and feasible to clear up much of the mess. Out conclusions can be summarised thus:

* There is a strong case for introducing a land value tax. The priority should be to use it to replace the economically damaging business rates system.

* Council tax should be reformed to relate it more closely to actual property values: levied as a proportion of up-to-date values with no cap and no discount for unoccupied or single-occupancy properties. We have called this a housing services tax to reflect its underlying economic rationale as a tax on housing consumption to substitute for VAT.

* [bullet three is arcane to the point of being gibberish]

* Finally, stamp duty land tax should be abolished and the revenue replaced as part of the housing services tax (for domestic property) and land value tax (for business property).

This is a radical set of proposals, and the changes would need to be phased in carefully. But this is also an area where the current practice is a long way from an economically rational and efficient system. Stamp duty and business rates defy the most basic of economic principles by taxing transactions and produced inputs respectively. Income tax and capital gains tax create a significant bias in favour of owner-occupation.

Meanwhile, council tax is indefensibly regressive and, thanks to spineless government refusal to undertake a revaluation, we find ourselves in the absurd position that tax bills are still based on relative property prices in 1991. Over time, this arrangement will some to be seen as more and more untenable. At some point, some government will have to grasp the challenge of making the case for intelligent.
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1. The 'housing services tax' they refer to is a copy of the new system of Domestic Rates in Northern Ireland, i.e. a flat 0.6% per annum on up to date capital selling values, which they would have instead of Council Tax/Council Tax Benefit. The include a chart on page showing that only owners of houses worth £500,000 or more (which is the top five per cent of houses by value) would be more than a couple of hundred quid a year worse off. An excellent place to start.

2. Stamp Duty Land Tax is 3% on sales of homes for £250,000 - £500,000, and 4% on sales of homes for more than £500,000. If there's a sale every twenty years, it costs owners of houses worth more than £500,000 about 0.2% a year on average (i.e. £1,000 a year for a £500,000 home; £2,000 a year for a £1m home etc). To replace SDLT, we'd need to increase the 0.6% rate by +/- 0.1% a year (on all properties).

3. They don't mention Inheritance Tax in the chapter, which is 40% on the total value of most assets (in particular housing, cash and quoted shares) in your estate above the threshold of currently £350,000-odd. Let's assume this is payable once every forty years, to replace this would mean hiking the rate by another +/- 0.1% (on all properties).

4. Owners of second homes would be a bit miffed with all this, so it'd only be fair to scrap Capital Gains Tax on land and buildings liable to the 'housing services tax', for much the same reason as the arguments against SDLT. This would mean hiking the rate by another +/- 0.1%.

5. At this stage, owners of expensive houses and/or second homes can be pretty satisfied with the outcome - what they lose on the Council Tax swing, they more than win back on the SDLT, IHT and CGT roundabouts.

6. But owners of the vast majority of houses that aren't liable to 3%/4% SDLT every time they are sold, which are beneath the Inheritance Tax threshold and/or which are not second homes would end up one or two hundred quid a year worse off with an 0.9% rate. So let's just go the whole hog, round up the rate by another 0.1% to a nice round 1.0% and scrap the TV licence fee instead (currently £142.50).

Job done.