'Council tax could go' says Labour leadership candidate
Mr Gray's supporters say it is an attempt to grab the initiative on local taxation from the SNP government and finish off its controversial plans to replace the council tax with a 3p centrally set local income tax (LIT), which have been widely opposed.
"The SNP's discredited LIT proposals have been exposed as unworkable, undeliverable and unfair. It is now for Scottish Labour to fill the vacuum left by the SNP," he said.
His proposal would bring parties that support a property-based tax together to replace the council tax or reform it.
This could include the Greens' proposal for a land value tax, which is used in Australia.
Green MSP Patrick Harvie welcomed the move. "It's a step in the right direction for one of their leadership contenders to be considering land value tax," he said.
It has also been welcomed by the UK government.
A source close to Scotland Office minister David Cairns said: "This is exactly the sort of fresh idea we wanted to see in this leadership election."
But he warned that any solution would need to consider the effects on Scotland's 400 million council tax benefit, which would be lost with LIT.
The SNP welcomed Mr Gray's realisation that "the council tax is unfair" but added that if he wanted a fair solution he should support LIT.