The government has been advised to implement a wealth tax on property by a leading economic adviser.

The government has been advised to implement a wealth tax on property by a leading economic adviser.

Martin Weale, the director of the National Institute of Economic and Social Research think tank, believes that homeowners should pay one per cent of the value of their property in tax, a measure which he believes would prevent house price inflation.

The Times calculates that homeowners would be expected to pay approximately £2,000 a year on average based upon its calculation that a UK house costs £187,000.

"I would certainly expect the tax to be a replacement for council tax, but with one per cent there would probably be something over and abolishing stamp duty, which is an obstacle to people moving homes, would be an obvious thing to do," Mr Weale told the paper.

He also suggested that council tax should be phased out over a ten-year period in conjunction with gradual increases in the proposed property tax.

A Nationwide property survey released last week showed that house prices rose by 1.4 per cent in January, which took annual growth to 4.4 per cent.