You have heard it first and it’s now official, ‘Britain has the highest property taxes in the World’ according to the latest survey of Global Tax Revenues by the OECD announced last week.
Taxes on Bricks & Mortar accounted for 12.3% of the total ‘tax take’ in 2013 – sharply up from 11.8% the previous year and over double the average of 5.6%.
Lest we forget, property taxes account for 4% of Britain’s Gross Domestic Product (GDP) that must render the Property Market as one of the most important sectors in the UK.
The SDLT (Stamp Duty) levels from the last two Autumn Statements will be seen as effectively the ‘straw that breaks the camel’s back’, and this is without even having the draconian Mansion Tax that the left wing zealots of the former Labour Party wanted to impose if they gained power in the May 2015 Elections.
As if this were not enough, you have the Labour Party’s new star, Tristan Hunt, pontificating about even higher Council Tax Bands for the wealthy. How much more can this ‘creaking system’ take of this sustained punishment?
Already the trends of Property buyers have changed substantially changed under the burden of these Taxes.
First time buyers have been further disenfranchised by the rise in property prices at the lower end and only a small number of these are benefiting from the Help-to-Buy initiative.
The Middle and Top End of the Property Market has been ‘hit’ very hard with transaction numbers down between 20/50% and existing house owners are choosing to extend, dig basements or organise loft conversions rather than pay these taxes by moving. In fact, we have calculated that the average ‘stay’ in any one home has now been extended from an average 18 months to over 5 years.
There is no question that when the Treasury assesses the Land Registry Receipts from SDLT, they will be substantially down when one full year of trading is taken into consideration. One hopes that the ‘Golden Goose’ that has been ‘laying the golden eggs’ for so long, has not been ‘cooked’ by the Chancellor in advance of the Festive Season.
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