The objectives of any local property tax should be to achieve fairness, equity, transparency, certainty, accountability and progressivity. The question posed by this research is, to what extent do the existing property tax systems in the UK achieve these objectives? Since 1993, Britain has used a 'banded' property tax as opposed to discrete values for the assessment of residential property partially on the grounds that valuation is not an 'exact science'(DETR, 2000).

The purpose of this paper is to present findings on the operation of this unique system, highlighting various strengths and weaknesses. The government takes the view; 'that the Council Tax provides a good model of how banding can provide simplicity and certainty, while maintaining fairness and reducing the scope for appeals and the need for frequent revaluations'. Notwithstanding this view, the paper will demonstrate the limitations of the existing system of banding used for residential property.

Through an analysis of a sample of property transactions the relationship between the sales prices and the bands to which those properties are allocated, and thereby their Council Tax liability is investigated. The research also analyses the results of a rebanding of all sample properties based on their 1997-98 sales prices to illustrate the movement of properties between bands and the resulting shifts in tax liability.

Despite central government's opinion that a revaluation for Council Tax is not yet necessary, the results demonstrate that merely altering the limits of the bands will not adequately reflect shifts in property prices and that both a revaluation and a reconsideration of the number and range of bands are overdue.

 The paper will include an historical overview concentrating on the origins of the banded tax, discussion of several of the key theoretical and practical concepts and a general overview of the position of government in relation to the tax. In the light of the government's recent indication of its willingness to consider the case of extending banding into the realms of Business Rates, the paper will also describe the results of empirical analysis demonstrating the inequity which has resulted from a failure to revalue (or reband) properties since 1991. In addition, the paper will focus on equity issues, effective tax rate analysis and a number of administrative aspects/concerns.

 In the light of the urgent need for reform in Northern Ireland (McCluskey 1999), an analysis of the implications of a banded revaluation for residential property in Northern Ireland is presented. The empirical research demonstrates the potential for a banded system in Northern Ireland which avoids the problems which exist in England and Wales.

 This paper results from unique research, which was supported by the Lincoln Institute of Land Policy (USA) and which stems from earlier research funded by the RICS's Education Trust, and is complete with the results not having been widely disseminated.