Making property taxes fair both politically and economically is no simple task; should tax aim to reduce housing demand or increase housing supply?
Policy Exchange’s comprehensive “Taxing Issues?” report, which reveals that the UK has the highest rate of property tax in the OECD (twice the everage level), outlines the sticking points and options available.
The best option, PE believes, is to leave it well alone and focus on sorting out planning policies to enable more houses to be build: “Politicians should focus on creating a housing and planning system that can deliver at least 1.5 million new homes between 2015–2020. Without this, calls for higher property taxation are likely to increase. But the message to politicians should be to focus on the creation and spreading of property ownership and wealth – not its taxation.”