Britain’s property tax burden is the highest of any major economy, new analysis shows, amid fears a new Labour Prime Minister could raise rates even further.
Taxes on property paid each year are now equal 3.7pc of gross domestic product (GDP), according to a study by advisory firm Ryan Tax Services.
The burden is the highest among major economies, topping the tax take even in France (3.4pc), Canada (3.4pc) and Belgium (3.2pc).
It follows a slew of increases to stamp duty, business rates and council tax during Sir Keir Starmer’s two years in office.
When measured solely on how much is raised through property taxes, the UK trails only the United States, where the property market is vastly larger.
Alex Probyn, of Ryan, said: “The UK sits at the very top of global rankings for property tax. That is not a marginal difference, but it reflects a system where property is taxed more heavily than in any other comparable economy.”
He warned that the burden was “beginning to weigh heavily on investment” and said there was “a clear tension between the need to raise revenue and the need to support investment.”
The country paid just more than £100bn through business rates, council taxes, stamp duty and land tax last year, Ryan said. This accounts for 11pc of total tax revenue, the highest proportion of any country, bar the US and Korea.
Tax rise fears
The warning comes amid fears that property taxes could rise even higher if Labour replaces Sir Keir as Prime Minister.
Andy Burnham, the favourite to succeed Sir Keir, has said assets and wealth are “undertaxed”. He has called for a revaluation of council tax bands, forcing more properties into higher rates, and reform of land tax valuations.
As Manchester’s Mayor, he has raised property taxes. In February, Mr Burnham announced a 20pc increase in Manchester mayoralty taxes, adding £25 to what had been an average £128.95 council tax bill for a Band D home in the city.
His main Labour leadership rival, Wes Streeting, the former health secretary, has not made his views on property taxes explicit, but has previously called for capital gains tax to be levied at the same rate as income tax, which would hit gains from property investments.
Sir Mel Stride, the shadow chancellor, said Ryan’s figures “expose the harsh reality of Labour’s high-tax economy: the highest property tax burden in the developed world, crushing investment, punishing enterprise, and holding back growth”.
In 2024, Ms Reeves increased the stamp duty surcharge on landlords and second-home owners from 3pc to 5pc. In her second Budget, she introduced a mansion tax on properties worth £2m or more.
