Cash-strapped governments have long wanted to grab a bigger share of the wealth we hold in housing, now the Organisation for Economic Co-operation and Development (OECD) says Britain should adopt a Continental European-style property tax.
Pier Carlo Padoan, chief economist of the OECD, says George’s Osborne’s cuts are “appropriate,” but the Chancellor must do much more to stimulate Britain’s economy. Mr Padoan argues he should scrap many VAT exemptions – including food, passenger transport and domestic fuel – and abolish council tax and stamp duty in favour of “a property tax based on market values.”
No, this isn\’t a land value tax, not even an approximation to it. It\’s a tax upon the value of the property, not the land underlying it.
But why not adopt such a \”Continental European\” style tax? It would mean lower tax bills for all, after all.
Yes, I know, hunh?
Have a look here.
The UK taxes property much more heavily than any other OECD country.
11.9% of the tax take comes from property as opposed to a 5.8% average over the OECD. If we move to a system like theirs then presumably the tax take will fall to be like theirs.
And yes, I\’m aware that systems and rates do not need to move in lockstep. But the stucture of a tax system does impose constraints on what the rates can be. You can\’t have a 25% sales tax for example, you\’ve got to convert it to a VAT if you want that sort of rate. I wouldn\’t want to assert it but I\’d most certainly not be surprised if moving to this sort of a property tax limited what could be charged, limited what could be charged to less than we already charge upon property.