British Property Tax Highest In Developed World

Landlords may feel the government is waging an unjust tax war against them – and statistics from an international economic monitor back up their claims.

The Organisation of Economic Co-Operation and Development (OECD) has published figures that show Britain has the highest property taxes of any developed country.

The analysis found property tax amounted to more than an eighth of all tax collected by HM Revenue and Customs (HMRC) – a whopping 12.7% of the national tax burden. The figures are for 2014.

They pre-date increases in stamp duty, capital gains tax and the proposed savage mortgage interest relief for higher rate taxpayers starting in April 2017.

The average OECD share of the money raised by property taxes in the other 35 member countries is 5.6%. The US and Canada are the only countries with a double-digit tax burden, although Australia and South Korea are nudging closer.

In 2014, residential and commercial property owners paid £74.2 billion ranging from taxes on rental profits to business rates and inheritance tax. A year earlier, the amount was £69.8 billion.

Besides increasing property taxes, the government is also turning the screw on landlords who have avoided paying what they owe.

The latest figures revealed by HMRC show that since September 2013, 13,000 landlords have coughed up £92 million in unpaid tax, interest and penalties under the Let Property Campaign.

The campaign offers landlords with undeclared rental profits the chance to settle their liability in return for less harsh penalties.

“The Let Property Campaign gives you an opportunity to bring your tax affairs up to date if you’re an individual landlord letting out residential property in the UK or abroad and to get the best possible terms to pay the tax you owe,” says HMRC.