British homeowners pay the highest property taxes in the developed world, resulting in more than twice the average amount of property taxes charged by the Organisation of Economic Co-operation and Development’s 34 richest countries, according to a recently released think tank report.
The report determined that property taxes in the UK, including stamp duty, council tax, capital gains tax, and inheritance tax amount 4.1 percent of the UK’s GDP, which is considerably above the 1.8 percent average and the highest amongst the countries in the OECD.
According to Alex Morton, Policy Exchange’s head of housing and planning, “No other developed country taxes property more heavily than the UK. Yet rising house prices and falling levels of home ownership have led to many calling for an increase to land and property taxes.”
Morton continued, “But these issues will only be solved by genuine reform of the outdated planning system, not a tax raid on people’s homes. Politicians cannot try to do everything at once and must focus on the most crucial issues. This means serious reform of the planning system and creating new ways to deliver housing.”
According to Morton, rather than issuing a new round of property taxes, the Government should focus on stabilising the economy and increasing homeownership by building a minimum of 1.5 million new houses during the next Parliament.
In response to the report, a Government spokesperson announced, “The Chancellor has been clear there are no plans for a new house price tax on family homes. This Government has frozen Council Tax for hard-working people and cut business rates for small firms, despite the need to pay off the deficit left by the last administration.”
“Every month, private tenants are seeing their dream of home ownership slipping further from their grasp – and all the while they’re paying off the mortgage of their landlord who gets rich from rising housing prices,” said Dan Wilson Craw, a Priced Out campaign spokesman.
Craw echoed Morton’s beliefs by stating, “This is a symptom of a society that treats houses as an asset to speculate on rather than somewhere for people to live. Tinkering with the tax system could help make the system fairer, but under-supply is the real problem. If political leaders were bold and built 1.5 million more homes over the next Parliament, they could make a real difference to the cost of living.”