London Daily

Focus on the big picture.
Monday, Sep 01, 2025

UK’s outdated property taxes favour the wealthy, says OECD

UK’s outdated property taxes favour the wealthy, says OECD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Britain’s property taxes are outdated and favour a wealthy elite, according to a comparison with other countries carried out by the Organisation of Economic Cooperation and Development (OECD).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It criticised countries that allowed annual property taxes to be based on outdated values that failed to reflect current trends.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

0:00
0:00
Close
Chinese and Indian Leaders Pursue Amity Amid Global Shifts
European Union Plans for Ukraine Deployment
ECB Warns Against Inflation Complacency
Concerns Over North Cyprus Casino Development
Shipping Companies Look Beyond Chinese Finance
Rural Exodus Fueling European Wildfires
China Hosts Major Security Meeting
Chinese Police Successfully Recover Family's Savings from Livestream Purchases
Germany Marks a Decade Since Migrant Wave with Divisions, Success Stories, and Political Shifts
Liverpool Defeat Arsenal 1–0 with Szoboszlai Free-Kick to Stay Top of Premier League
Prince Harry and King Charles to Meet in First Reunion After 20 Months
Chinese Stock Market Rally Fueled by Domestic Investors
Israeli Airstrike in Yemen Kills Houthi Prime Minister
Ukrainian Nationalist Politician Andriy Parubiy Assassinated in Lviv
Corporate America Cuts Middle Management as Bosses Take On Triple the Workload
Parents Sue OpenAI After Teen’s Death, Alleging ChatGPT Encouraged Suicide
Amazon Faces Lawsuit Over 'Buy' Label on Digital Streaming Content
Federal Reserve Independence Questioned Amid Trump’s Push to Reshape Central Bank
British Politics Faces Tumultuous Autumn After Summer of Rebellions and Rising Farage Momentum
US Appeals Court Rules Against Most Trump-Era Tariffs
UK Sought Broad Access to Apple Users’ Data, Court Filing Reveals
UK Bank Shares Dive Over Potential Tax on Sector
Germany’s Auto Industry Sheds 51,500 Jobs in First Half of 2025 Amid Deepening Crisis
Bruce Willis Relocated Due to Advanced Dementia
French and Korean Nuclear Majors Clash As EU Launches Foreign Subsidy Probe
EU Stands Firm on Digital Rules as Trump Warns of Retaliation
Getting Ready for the 3rd Time in Its History, Germany Approves Voluntary Military Service for Teenagers
Argentine President Javier Milei Evacuated After Stones Thrown During Campaign Event
Denmark Confronts U.S. Diplomat Over Covert Trump-Linked Influence in Greenland
Starmer Should Back Away from ECHR, Says Jack Straw
Trump Demands RICO Charges Against George Soros and Son for Funding Violent Protests
Taylor Swift Announces Engagement to NFL Star Travis Kelce
France May Need IMF Bailout, Warns Finance Minister
Chinese AI Chipmaker Cambricon Posts Record Profit as Beijing Pushes Pivot from Nvidia
After the Shock of Defeat, Iranians Yearn for Change
Ukraine Finally Allows Young Men Aged Eighteen to Twenty-Two to Leave the Country
The Porn Remains, Privacy Disappears: How Britain Broke the Internet in Ten Days
YouTube Altered Content by Artificial Intelligence – Without Permission
Welcome to The Definition of Insanity: Germany Edition
Just a reminder, this is Michael Jackson's daughter, Paris.
Spotify’s Strange Move: The Feature Nobody Asked For – Returns
Manhunt in Australia: Armed Anti-Government Suspect Kills Police Officers Sent to Arrest Him
China Launches World’s Most Powerful Neutrino Detector
How Beijing-Linked Networks Shape Elections in New York City
Ukrainian Refugee Iryna Zarutska Fled War To US, Stabbed To Death
Elon Musk Sues Apple and OpenAI Over Alleged App Store Monopoly
2 Australian Police Shot Dead In Encounter In Rural Victoria State
Vietnam Evacuates Hundreds of Thousands as Typhoon Kajiki Strikes; China’s Sanya Shuts Down
UK Government Delays Decision on China’s Proposed London Embassy Amid Concerns Over Redacted Plans
A 150-Year Tradition to Be Abolished? Uproar Over the Popular Central Park Attraction
×