Buy to Let Property

Property Taxes – What Makes Biggest Burden to the UK Residential Market?

Property taxes biggest burden to the UK residential market

Britain as a country has witnessed a lot of ups and downs in recent past. Brexit has placed Britain under the limelight and citizens are expecting some rebates in taxation from the government. It is not only people who are looking up to the new government in anticipation but also the grid of entrepreneurs. Individuals interested in construction and property business are not very happy with the contemporary norms and taxation regime.

What does the survey reports say about the property taxes in Britain?

One of the biggest benefits of living in a Democratic country is that people can voice their opinions and 70% of Britain citizens feel that the tax system is anti-growth and unfavourable to industry. The survey conducted by Audit, Tax and Advisory Firm, Crowe Clark Whitehill highlights that 68% participants are not happy with Stamp Duty Land Tax and considers it to be a barrier to growth.

Brexit has shifted the focus from other European states to Britain and now people here are expecting path-breaking reforms that could cater to wider growth opportunities. The government is now under pressure to carve paradigms that favours growth and boosts the economy.

A huge percentage of participants also feel that Capital Gains Tax is one of the biggest stop words. 12% of participants want to see this Capital Gains Tax System gone in the next twelve months.

What are some of the most important revelations of Survey?

The survey conducted after Brexit has made it very clear for the government; people have voiced their opinions in unison and have shared their expectations with the newly formed government. Here are some of the highlights from the survey:

  •  53% participants think that tax system is not favouring property and construction businesses
  •  48% participants are sceptical that Brexit will work in favor of industrial growth
  •  54% participants have staunch belief that SDLT will continue to hamper growth
  •  44% participants believe redevelopment of Brownfields site holds the bright future of London properties

What the government should do to bring down the property tax?

Well, it is going to take more than two years for Britain to separate itself fully from Europe. The negotiations are to be completed within two years but experts believe that it will take at least ten years for moving out of EU fully. Article 50 is going to play an important role in favor of 27 other members of the Europe. Britain will be looking forward to the evocation of Article 50 so that they can trade freely and acquire properties in European countries.

The people of Britain have made their demands for next 12 months very clear; they have proved government with a well-managed list of agenda the government should be working upon in next 12 months.

Here are some of the things people of Britain expect from the government. These changes are going to boost property accounting and businesses:

A complete makeover of the taxing system: Yes! People believe that a complete overhaul of the taxing system will lead to reduced taxation, which will indirectly increase public investment and encourage growth. With people having more money in their pockets, they will be able to do other things, which will increase the movement of money in market leading to better economic growth.

Cuts to SDLT: Reducing Stamp Duty Land Tax will help construction and property businessmen do more business. The whole world has been witness to the disaster SDLT has done to property market; it is now time to revert the impact.

Policy Simplifications: participants also feel that Government should actively simplify the policy. It is only by simplifying policies and reducing taxes side by side that government can encourage businessmen to step back into construction and property businesses. With investors and businessmen re-entering the market will see a boost.

Demand for Brownfield Sites: Yes! The people of Britain want their government to ensure that Brownfield sites are made available for building properties and living homes. The citizens are ready to put pressure on the government to ensure that none of these brownfield sites is used for any other purpose than building properties and home. With the brownfield sites used for building living homes and properties the people of Britain, specifically, London will be able to acquire homes and lead comfortable lives.

What are brownfields?

Brownfields are the land, which was previously used for industrial setup but are now, unfit for agriculture due to contamination and pollution.

Decisive Action: The last thing people of Britain want their government to do is to take decisive actions so that the values of properties are not reduced as an impact of Brexit. The people want the government to ensure a smooth transition out of EU and ensure the long-term competitiveness of Britain properties in the international market.

Brexit is having a diverse effect on the confidence of investors and buyers and it is only by implementing these demands and overhauling the present taxation system that government can make people happier again.

About the Author:

Sumit Agarwal
, A specialist accountant and tax adviser for freelancers, contractors and small businesses since 2005, He is an expert in business growth and development strategies. A renowned tax expert for owner managed businesses and contractors, He won the British Business Forum’s Young Entrepreneur Award in September 2012, presented at the House of Commons by MP Vrinder Sharma.