Stanley Property London

Patrick's Property Politics

Is PWT APT for the UK?

Wednesday 26th June 2024

By Patrick Bullick

What?! I hear you say.

The French have a Property Wealth Tax (PWT) which - being French - they call IFI (Impôt sur la Fortune Immobilière).

I am not trying to be difficult, though it does come naturally - but my preferred name for this awful tithe is - Annual Property Tax (APT).

The reason why I want to call it an Annual Property Tax is because that is what it would be if I were King - it is not to do with ‘wealth’ which is a subjective and potentially antagonistic term.

We need:

a) an overhaul of property taxes

b) a fluid property market unsullied by distorting transaction taxes

c) an alternative to Council Tax

In an ideal world we would abolish Council Tax altogether.

However, that is too simplistic.

Local Authorities need to be accountable to their voters and Council Tax does at least link the voter to the taxes they pay locally.

Political history Wonks see the paragraph at the end.*

Regrettably, APT may have to be on top of Council Tax.

Stamp Duty needs to be abolished or at a much lesser rate – across the board to compensate for APT.

French APT is on the owner of any property - with bands of marginal tax rates. Note the rate is in Euros! Thus:

Band of value                                         Rate of tax

Up to 800,000€                                      0%

800,001 € to 1,300,000 €                 0.5%

1,300,001 € to 2,570,000 €              0.7%

2,570,001 € to 5,000,000 €             1%

5,000,001 € to 10,000,000 €           1.25%

Above 10,000,000 €                              1.5%

So, an individual owning property with a total value of - say €2.2m would pay a tax of €8,800.

This is an acceptable sum PROVIDED the Council Tax and Stamp Duty are much reduced.

The problem with all of this is that a Labour government in particular, is likely to abuse the situation. Although this latest bunch of Tories are just as bad.

Treasury fiddlers will simply make APT another way to raise revenue, ignoring or not recognising, that to over-tax an activity reduces the tax take.

However, the huge upside of APT is that it drives people who hold a property unnecessarily, or unproductively, to pay tax for their lack of focus.

I have a French client who had a large estate but who through lack of income has had to sell off cottages and land to pay the APT and as a consequence, is left only with the lateral chateau. Oh Les Pauvres !

It sounds brutal but if an older person is still living in large house, beyond retirement, and finding the APT tricky, they might downsize and release it for a younger, bigger family -lessening their own tax and releasing cash for retirement.

Or - it will make people with second homes think very carefully about their real need for that country retreat.

Either which way, I now prefer the concept of an APT to Council Tax and Stamp Duty.

What do you think?

Until next time…

PB

*We need to remember that Margaret Thatcher’s main original reason for bringing in the Poll Tax - now Council Tax - instead of rates, was to try to tackle the problem of the ‘Militant’ wing of the Labour Party.

These left-wing nutters had taken hold of local councils and were deliberately bankrupting themselves to help bring down her government and spawn Communism in the UK. Derek Hatton in Liverpool and Red Ken Livingstone in London being examples who come to mind.

Maggie wanted to bring electoral accountability to these profligate local councils by replacing the old rates system with a local tax which was collected from all voters, be they owners or tenants.

We forget but Militant politics was a real thing in the 80’s. Thankfully, Corbyn failed to successfully resurrect it.

Sign up for market updates

Other articles you might enjoy

CGT Reprieve?
Just A Minute: Right Turn
Just A Minute: I Give Up
'C' How You Like It MPs?
Just A Minute: Cleverly Done?
Just A Minute: Consecutive Conveyancing
Bad Budgets & Behaviour
Just A Minute: Rachel Reeves Rumours
Just A Minute: Councils Building Council Houses
Communism and the Civil Service
Just A Minute: A View from the Fish Tank
Just A Minute - Landlords leaving under Labour
Market Trends and Tax Challenges
Just A Minute - PB's Plea to S'Kier
Is PWT APT for the UK?
Just A Minute - LonRes Lowdown
Goving, Going, Gone.
Just A Minute: Foreign Investment Fury
Savvy Supermarkets
Just A Minute - Forever Home
To Sell or Not to Sell? That is the Question.
Will the Scottish Shambles lead to a Labour Landslide?
Just A Minute - Property Taxes Under Labour
Vested Interests Strangling UK Property
Just A Minute: Non-Dom Taxes & London
I'm not my usual furious self. Why?
Just A Minute - ONS Statistics Seasonal, Surely?
Budget Leaves Landlords Bereft
Short-Let Sh*t Show
Just A Minute - Short Let Shambles
Easy Access In Old Age
Share All The Sh*t
Just A Minute - Renters Revenge Bill
Stop Buggering-up Brexit. Drop taxes and Build, Build, Build.
Are We Missing A Trick?
Just A Minute - Interest Rates Shocker?!
Happy Christmas - Enjoy Election Year!
Tories Trash 2023
KC3 & the Right to be Free
Just A Minute - Inflammatory Interest Rates
Best ways to make money from London property
Steer clear of S’Keir?
Just A Minute - AirBnb and long lettings
Is it Smart To Invest in Repossessions?
It isn’t just Parties & Prostitutes
Banks take Tenants to the Dark Ages
UK House Prices - August Review
Death, Divorce, Downsizing & Now Debt
Just A Minute - Pitfalls of the Politically-Exposed...
Rates of Interest in London - It’s Not a Horror Show
The Sharks are Circling
Why AI!
Just A Minute - Stamp Duty Is Silly Money
Tenants in Double Trouble
Just A Minute - Renters Revenge Bill
Farmers Forked by Skier?
Renters Revenge Bill
Just A Minute - 100% Mortgages
A Clear Steer from Skier (Starmer)?
To Inherit or Be Gifted ...that's the question!
Just A Minute - Questionable Question Time
KC3 and the Winds of Change
Doom and Gloom - Get me a Broom…
Just A Minute - Spring Budget
Rising Rents and our Muppety Mayor
Help to Buy - Time to Die
An Englishman’s Home is his Castle
Ignore the lot of them and Grind ourselves to Growth!
What new Hunts-Trick can we expect in the Budget?
Housing is a Step Up the Ladder
Are We All Scots Now?
Fill a Field vs Brand New Towns
Happy Christmas in Troubling Times
ER ll
Too old to 'Rock & Roll' but too young to die.
Strangle The Supply, Throttle The Treasury
Jeremiah was a Bullfrog (Joy to the World)
Modern Mini-Manifesto
Patrick's BBC Wake Up Call
Rishi Rides to the Rescue
Pension ‘Professionals’ cause Property Problems
Conservative (Ms) Communication & Catastrophising Keynesians
Even The Rich Benefit From Equity Release
School Schedules Suck
Perils of Predicting Politics and Property...
Ride the Wave of the Short-Let Sh*t-Show
Sushi or Sashimi - or the Vampire Squid that is HM Treasury?
Short Sadiq & Silly Lets - Sorry, wrong way around perhaps?
Tory Tw*ts & their Terrible Taxes
Where's The Get Up and Gove?
Tony Blair: An old warmonger with ideas
Lovely Jubbly Jubilee!
Far from falling – Central London flat prices may be about to take off.
I do feel rather old...
To Landlord or Not to Landlord? That is the question.
The impact of rising gas prices and Russian sanctions on the central London property market
Contrary Views & Bullshit
School gate Skills Scandal
1st quarter 2022 prime central London market analysis
Does Rishi Sunak's statement promote Spring growth?
Air-Source Heat Pumps - Hot Air for London
London Property Market. Less a Laundromat - more an Airing-Cupboard
Childish Chelsea Chanting
As interest rates rise, the rental investor still wins
ONS predict UK population growth plateau. Is it a demographic time bomb or a tax-easing gift horse?
No gains – No tax. Typical Treasury Twittery
Arrange a free market appraisal of your property

Send us your details and we’ll give you a call to arrange a convenient time to appraise your property:

Your details

Thank you for your request.
We’ll be in touch soon to arrange your market appraisal.

Thank you for your request.
We’ll be in touch soon to confirm your appointment.

Thanks for submitting

Share this article
Sign Up For Market Updates