TIMES.KY

Cayman Islands, Caribbeanand International News
Thursday, May 23, 2024

UK’s outdated property taxes favour the wealthy, says OECD

UK’s outdated property taxes favour the wealthy, says OECD

An increase could mean lower income tax and and also help young people on to the property ladder
Britain’s property taxes are outdated and favour a wealthy elite, according to a comparison with other countries carried out by the Organisation of Economic Cooperation and Development (OECD).

The report found that surging property prices across the OECD’s 38 member states were a cause for concern and should be restricted by more punishing property taxes.

In a series of recommendations that will make difficult reading for supporters of low property taxes, the Paris-based organisation said governments could cut taxes on workers’ incomes by raising charges on property wealth.

Laying out a six-point plan for property tax reform, the OECD said countries that sought to spur economic growth by cutting taxes on property transactions were propping up sky-high prices and favouring already wealthy sections of society.

Residential property has become the number one investment target for most people in the developed world, accounting for around 80% of all asset investment in the last 10 years. About 90% of bank lending is on mortgages.

Last year the Resolution Foundation thinktank said the government should increase property taxes to recoup some of the £3tn gained from property price rises over the previous 20 years.

Since the 2008 financial crash, when UK house prices dipped by about 15% on average, house values have soared. The most recent official figures showed prices grew by 12% in the year to May, despite concerns about the Russian invasion of Ukraine and the increasing likelihood the UK will suffer a recession later this year.

The then chancellor, Rishi Sunak, cut stamp duty on housing transactions up to a value of £500,000 in response to the downturn following the first pandemic lockdown. In the last two years house prices have increased by more than 20%.

In its annual review of taxes on housing, the OECD identified “a variety of ways in which the design and functioning of housing taxes could be improved”.

It criticised countries that allowed annual property taxes to be based on outdated values that failed to reflect current trends.

Britain’s only annual tax on property – council tax – is based on a banding system that uses house values dating back to its inception in 1993. It has been widely criticised by economists who argue it favours residents in larger houses that have gained in value over the last 30 years.

The report highlights that housing is the main asset for most households, and plays an even more important role for middle-income households, with owner-occupied housing representing on average 60% of middle-class wealth.

“Nevertheless, high-income, high-wealth and older households hold a disproportionate share of overall housing wealth. Unprecedented growth in house prices over the last three decades has made access to the housing market increasingly difficult for younger generations,” the report said.

Pascal Saint-Amans, director of the OECD centre for tax policy and administration, said governments could cut taxes on income if they pushed ahead with reforms to property taxes that raised extra funds.

“In the face of unprecedented housing market challenges, it is more important than ever to ensure that housing taxes are both fair and efficient,” he said.

“There is significant scope for countries to improve the design and functioning of housing taxes and this report provides a number of policy options to help countries implement reform.”
Newsletter

Related Articles

TIMES.KY
0:00
0:00
Close
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Israel: Unprecedented Civil Disobedience Looms as IDF Reservists Protest Judiciary Reform
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
Europe is boiling: Extreme Weather Conditions Prevail Across the Continent
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Italian Court's Controversial Ruling on Sexual Harassment Ignites Uproar
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
BBC Personalities Rebuke Accusations Amidst Scandal Involving Teen Exploitation
A Swift Disappointment: Why Is Taylor Swift Bypassing Canada on Her Global Tour?
Historic Moment: Edgars Rinkevics, EU's First Openly Gay Head of State, Takes Office as Latvia's President
Bye bye democracy, human rights, freedom: French Cops Can Now Secretly Activate Phone Cameras, Microphones And GPS To Spy On Citizens
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
Unilever Plummets in a $2.5 Billion Free Fall, to begin with: A Reckoning for Misuse of Corporate Power Against National Interest
Beyond the Blame Game: The Need for Nuanced Perspectives on America's Complex Reality
Twitter Targets Meta: A Tangle of Trade Secrets and Copycat Culture
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
The New French Revolution
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner
×