The UK shares the highest rate of property taxes compared to the 38 countries in the Organisation for Economic Co-operation and Development (OECD), according to a new study from the Altus Group.
The study shows that the UK’s property taxes stand at a ratio equivalent to 4% of its Gross Domestic Product (GDP).
This figure significantly surpasses the average property tax rates in other regions. For instance, the average across the European Union (EU) is only 1.5%, while the average in the G7 group of advanced economies is 2.9%.
In the UK, property taxes comprise council tax, business rates, SDLT (stamp duty land tax), and LBTT (land and building transaction tax) in Scotland.
Alex Probyn, president of property tax at Altus Group, said: “The United Kingdom is characterised across the developed world as having higher levels of revenue from taxes on property.
“Our clients already tell us that the level of the business rates tax is a disincentive to invest and an effective tax rate of 54.6% next year for commercial property will do nothing to dispel that.”
Furthermore, the Office for Budget Responsibility anticipates an increase in UK property taxes. Business rates are expected to rise by £3.2bn from April 1st due to an inflation-linked increase.
“Similarly, council tax receipts are forecasted to grow by £2.3bn. These projections point to a continued trend of high property tax rates in the UK, which may have considerable implications for investment and the business sector.
