Halifax said that the need for reform is pressing and will lobby all parties as none has yet formally committed to a significant reform of the UK’s property tax regime.
Research from the Organisation for Economic Co-operation and Development (OECD) shows that UK property taxes as a percentage of gross domestic product (GDP) are the highest for any major developed country.
According to the OECD UK property taxes have risen from 3.7 per cent of GDP in 1995 to 4.3 per cent in 2002, the most current data available. In contrast, the average for Euro-zone countries is just 1.9 per cent.
The UK is only one of only four OECD countries where property taxes make up more than 10 per cent of Government revenues, the Euro-zone average is 4.9 per cent.
In the UK property taxes as a percentage of total Government revenue has increased from 10.5 per cent in 1995 to 12.0 per cent in 2002.
Shane O’Riordain, general manager of government relations at the Halifax, said: “Change is long overdue. Successive governments, irrespective of their political colouring, have not played fair with homeowners. This policy needs to change now.
“Halifax believes that, at the very minimum, property tax thresholds need to be automatically aligned with house price inflation.”
Peter Bolton King, chief executive of the National Association of Estate Agents (NAEA), comments: “We urge the government to listen to what every financial organisation, industry body and member of the public is saying and bring stamp duty into the 21st century by adjusting the levels accordingly.
“Otherwise it could mean the total extinction of first-time buyers and serious effects on the health of the remainder of the market.”
