Over £80bn was collected in property taxes in 2016, giving the UK the highest property taxes of all the countries in the developed world, both in terms of GDP percentage and overall taxation.
November 2017 figures from the OECD show that £81.4bn was collected in 2016 from commercial and residential properties in the form of rates, stamp duty and inheritance tax during 2016. The taxes collected have risen by £19.9bn in the past seven years. Property taxes are 4.1% of GDP, a higher rate than France (4%) and Canada(3.8%).
Stamp duty on second or more properties rose to 3% in 2016, but the government is lowering some taxes. In the November 2017 Budget, stamp duty for first-time buyers was abolished for properties worth £3000,000 or less. Stamp duty is not paid on the first £300,000 of more expensive houses. The government has also said that business rates will fall, and it is expected that the local authorities will collect £9.5bn less in business rates during the next five years.
Alex Probyn of the Altus Group said:
“There’s no denying the attractiveness of property taxes for Government. Collection rates are high and they are increasingly hard to avoid. A building is harder to hide than a profit.”
Higher taxes have not put off activity in the commercial and residential property sectors. Despite the November Bank of England base rate rise, residential and commercial mortgages remain available at low interest rates and mortgage brokers are reporting brisk business.