Britain has the highest burden of property taxes in the world, new research has revealed, as the Chancellor looks at ways to raise even more revenue to repair the public finances.
I’ve been making the point for well over a decade.
The Organisation for Economic Co-operation and Development (OECD) found that tax receipts generated from property climbed to £91bn in 2019, up from £88bn the previous year. Property tax receipts were worth 4.1pc of GDP, ranking top for a second straight year and just ahead of France, a typically high-taxing country.
The Government raises 12pc of its revenue from taxes hitting homeowners and business premises, such as stamp duty, business rates and council tax, the OECD revealed. That is around double the levels of property taxation seen in the average OECD country – a group of 37 developed nations.
This also isn’t even new research, they’ve been publishing the same set of stats – adjusted per year, obviously – ever since I can remember.
It’s a shame local property taxes don’t cover the cost of local government. If they did we might get better government.
After listening to that hearing I think these are coming up for reform.
Given most local regions are one party states there is even less pressure to be responsive to voters than at the national level. If you want control of how your money is spent then you want the right to spend it yourself (school vouchers, NHS to make sure people can pay for treatment, not exclusively there to provide it).
How about repairing the finances by spending less money?
‘tax receipts generated from property climbed to £91bn in 2019’
You can’t take a few bricks off the estate to pay your taxes. The levy is on property, but it’s paid with cash – different property. So you are taxing the owners, not the property.
Just compare the amount of legislation that brings in this £90bn compared with the amount required to bring in the taxes on income, corporations, inheritance, NI, VAT. How annoying it would be for the would-be Lord Ely if the main tax burden were put on properties. The tax gap and tax avoidance would be negligible. He would have no reason for existence
Time for a bedroom tax on private properties to hit singletons living in multi-bedroom unimpressive end terraces and heating them unnecessarily causing climate change
Council tax (England): £30bn
Non-domestic rates (England): £25bn
Stamp Duty Land Tax (UK): £11bn
That adds up to £66bn. Not sure how they get to £91bn.
Government doesn’t raise revenue from council tax, councils do. The clue is in the name. Before the 1990s business rates were council funding as well, until that was stolen by government.
Tim I seem to remember you saying something about deadweight costs and squeaking pips?
Indeed so, that doesn’t excuse Polly and the like – and she’s said it repeatedly – telling us that property is undertaxed with respect to other countries.
Councils aren’t government?