UK tops world rankings for highest property taxes

PA

The UK has topped the rankings for the highest property taxes as a percentage of overall taxation in the developed world for the second year running, according to new data.

Tax revenues from property hit £90.6 billion during the financial year for 2019/20, up from £88.4 billion in the previous period, the Organisation for Economic Co-operation and Development (OECD) said.

The details mean the UK has seen the highest property taxes in six of the last 10 years, based on OECD data.

High streets have enjoyed a business rates holiday
High streets have enjoyed a business rates holiday

In the UK, property taxes include all receipts from council tax, business rates and stamp duty. In Scotland it also includes land and building transaction taxes.

Retailers and hospitality firms in the UK were given a business rates holiday this year due to the Covid-19 restrictions and lockdowns, to ease the burden.

However, several essential retailers have subsequently agreed to hand over the savings, including Tesco, Sainsbury’s and Aldi, to the tune of about £2 billion.

Further analysis from the real estate adviser Altus Group shows that tax revenues from property have risen by 46.6% since 2010, with £757.8 billion having been collected across the UK during the last decade.

Total overall tax revenues for 2019/20 rose to £731.1 billion in the UK, up £25.9 billion on the previous financial year, with property taxes in the UK accounting for 12.4% of overall taxation – about £1 in every £8 of all taxes collected.

Second place was the US with 12.1%, followed by Canada at 11.6%, South Korea at 11.4% and Israel at 10.1%.

Robert Hayton, head of property tax at Altus Group, said: “The unexpected cost of Covid might mean that the Chancellor has limited short-term scope to meet his commitment to reduce the burden of tax on commercial property, but that mustn’t also mean potential reforms are shelved.

“There are fiscally neutral, and blindingly obvious, changes that could be made to property taxes that would increase fairness and pave the way for a better system in the future.”

In the summer, the Chancellor also introduced a stamp duty holiday for anyone buying a property below £500,000 in England.

The tax break ends in April and the Government has said it will not be extended.

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