The council tax will be scrapped and replaced with a new property tax if Scottish Labour form the next Scottish Government.

In a speech on Tuesday, the Scottish Labour leader Kezia Dugdale claimed her party’s plans would see two million households pay less tax. Labour’s replacement tax would be largely based on property values which is currently the basis of the council tax.

Dugdale said: “Labour will abolish the unfair council tax and leave nearly two million households better off, with 80% paying less than they do today.

"Nicola Sturgeon was elected and re-elected on promise to scrap the council tax. After a decade in power and with a majority in Parliament she now wants to keep the council tax instead.

"After ten wasted years and hundreds of millions of pounds of cuts to local services that simply isn’t good enough.

"Labour will make good on the SNP's broken promise and scrap the council tax. We will fix the funding of local services for good. It’s a fair plan which means millions will pay less and those who can afford to will pay a little more.

"The SNP commissioned a report into replacing council tax and then bottled it when it was time to be radical. We have taken that report, and its research, and voters can now choose a fairer alternative to council tax."

Under the proposals local taxation would be split into two bands.

Properties worth £180,000 or less:

Properties worth £180,001 or more:

Scotland’s richest households would see their payments capped at a maximum of £3,000 in the first year of the tax. While local authorities would be restricted in raising the tax rates to a 3% limit year on year.

According to Scottish Labour their proposals would mean a household with a property value of £100,000 would pay £800, £94 less than under the SNP's local taxation plans. However, a household with a property value of £300,000 would pay £2,160, £293 more than under the SNP.

In a further announcement the Scottish Labour leader pledged to devolve powers away from Holyrood to local authorities. Dugdale set out plans to give local councils the power to set a “tourist tax” and a land values tax.

The Scottish Government defended their local taxation plans.

Local government minister Marco Biagi said: "Our plan is to reform the Council Tax to make it fairer and see an additional £100m a year invested in schools. This means no change for three out of every four Scottish households, with those in lower banded properties paying no more than they do now.

“Households will also, on average, pay less than those on equivalent bands in England and less than they would be paying had the council tax freeze not been in place."

Both the SNP and Labour have clashed on repeatedly on taxation.