Err, yes, as I’ve been saying for near a decade now

Britons pay the highest property taxes in the developed world

Yep.

UK residents are paying twice as much as the international average, a report by the influential think tank Policy Exchange found.

Property taxes in Britain cost the equivalent of 4.1 per cent of gross domestic product – around £70 billion — in 2011, the think tank said. The OECD average is 1.8 per cent.

We get more of our tax revenues from property taxation than any other member of the OECD.

Vastly more in fact. Meaning that anyone at all who starts bleating that property is undertaxed is either ignorant, a moron or lying.

And no, don’t then start bleating about land value taxes: they are conceptually different from property taxation.

8 comments on “Err, yes, as I’ve been saying for near a decade now

  1. Risking being called “ignorant, lying or a moron” why is 4.1% not “under-taxed”. Just because other countries have lower property taxes doesn’t make our 4.1% “wrong”.

    What is the ideal level of property taxes ? We pay 20% on purchases of goods. 50-80% tax on booze, ciggies and fuel. Approx 30% on income.

    Why isn’t higher levels of tax on property, and therefore lower levels of tax on earnings, a good thing ? That rewards work/productive investment and ensures a more efficient use of housing assets.

    Tim adds: I would very gently suggest that you reread the post. 4.1% is not the tax rate: it’s the percentage of GDP that is raised by this tax. A little less than the total VAT bill and vastly more than the booze and ciggie taxes.

  2. It’s a problem of structure, not the amount paid. Stamp duty is a tax on buying & selling property; it’s not a tax on ownership. Council tax is a tax on occupying a residential property; business rates are a tax on occupying a commercial property: both are paid by tenants, not owners. We have no taxes on property ownership. Therein lies the problem.

  3. Taxes are too high. Far too high. The problem is getting any sort of agreement on what the State could spend less on.

    It’s currently spending around £50bn, scheduled to rise to £68bn by 2017, on interest on borrowing, by the way. Even though the State has the power to create, rather than borrow, money into existence. Just saying.

  4. It’s all apples and oranges.

    In Austria it is very complex:
    If I transfer the ownership of a property without money changing hands ( e.g. death, divorce ) there’s a stamp duty of 1.1 %. On purchase there’s 3.5% stamp duty.

    BUT an owner who sells a property is expected to pay 25% on the profit ( which of course you can offset against building work etc ). But does that count as a property tax ?

  5. This is rubbish. Taxes are higher elsewhere. In France you pay about 7% to the government on purchase whatever the price. Then there is a property tax every year paid by the owner, also a wealth tax if he is above a certain bracket (which would cover most of London).
    If we pay so much in the UK, it’s because the prices are inflated and we CHURN. I doubt other countries have quite so many estate agents, it’s the same problem.

  6. @John Barrett

    “BUT an owner who sells a property is expected to pay 25% on the profit ( which of course you can offset against building work etc ). But does that count as a property tax ?”

    Sounds like a capital gains tax to me, presumably even on the owner’s home, unlike the UK.

  7. Tim:

    Meaning that anyone at all who starts bleating that property is undertaxed is either ignorant, a moron or lying.

    I’ll put to one side the fact that paying more than others doesn’t inherently mean we are undertaxed.

    I think the main problem in this discussion is the definition of “property tax.” Two separate definitions seem to be used interchangeably:

    -the first definition is solely taxes on the holding of real estate, such Council Tax and Business Rates. When people talk about undertaxing, I think this is generally the class of taxes they are referring to.

    -the second definition also includes taxes on the holding of real estate, but adds in taxes on the transfer of real estate, such as stamp duty. In the UK, it is the transactional taxes which tend to drive the increases, as they tend to increase in line with land and building prices.

    I tend to think that stamp duty is way too high, but the taxes on holding are too low, with the two things being connected.

  8. I’ll try not to go too deep into this as it is very confusing, but I’ve looked it up and basically it is called the Immobilienertragsteuer ( property yield tax ) which you declare as part of your income tax ( bloody hell, even typing that makes my head swim ).

    My Austrian local tax is quite amusing. I pay for the bins and metered water usage and because it’s in the country, “disease protection”. Things like road repairs etc are paid for by the local state through its cut of income tax. But get this: 2/3rds of the tax is for sewage. It is not calculated on my water usage like I am in the UK, but the squarefootage of the house.

    Strangely enough, the Austrian tax is more or less the same as my Council Tax.

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