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13 Nov 2013

British Property Tax Highest Among Most Developed Countries

British taxpayers are charged with the highest property taxes in comparison to other countries from the developed world. In fact, UK property taxes are almost twice as high as the average in countries in the Organisation of Economic Co-operation and Development (OECD), a new report by think tank Policy Exchange claims.

The think tank has calculated that in total, property taxes, including stamp duty, inheritance tax, council tax, and capital gains tax come in at 4.1% of UK´s GDP. By contrast, the average property tax in the OECD countries accounts for 1.8% of GDP.

According to Alex Morton, head of housing and planning at Policy Exchange, there are serious problems with the British planning system. On the one hand, property owners are already taxed more heavily than any other developed country, but on the other, many people have called for further increases in land and property tax, as home ownership levels continue to fall and housing shortage issues become more pressing.

Morton believes the problem can only be solved through a reform in the UK´s outdated planning system, instead of burdening people with higher property tax. The report by Policy Exchange estimates that as many as 1.5 million new homes will have to be constructed by 2020, in order to stabilise the economy and tackle critical issues such as credit excess and under-supply. This is the equivalent of around 300,000 new homes per year, which is twice as many as what is being delivered at present.

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