Blanket tax on all property and land has been proposed by the government.
The prospect of new property taxes have been thrown around for a while now. There is a much debate how they should be enforced. With many challenging new proposals to ensure that they are efficient.
Recent news has revealed that the government intend to introduce a tax for all property and land. It would apply to land or property and most notably regardless of whether either is in use or not. Therefore vacant, rented and owner-occupied land and property would be taxed with no allowances given.
The tax would be calculated on the value of the land or property. A figure that will be determined by the Treasury Department. This ‘cost approach’ is a move away from ‘income approach’ where tax would be calculated on how much the property generates on an annual basis.
Additionally the tax will look at the use of the land or property. Each will be assessed as there will be different rates for residential and commercial properties although some overlaps will exist. For example a commercial property typically is defined as a property that generates an income. However a buy-to-let investment produces revenue therefore this is an area that will need to be ironed out. A residential tax rate will apply to each residential property. First homes will receive a small discount however.
The aim of these new property taxes is to provide a clear framework for people to understand. Additionally, the government want to attempt to minimise the wealth gap. Therefore they need to ensure that the system will fulfill this whilst ensuring that there are no loopholes for property and land owners to take advantage of.
