Adrian Black delivers critical property market insights and the influences, behaviour and money driving them.
The Government needs to raise more tax. The economy is growing and the government borrowed £107bn in fiscal year to March 2014. I accept that tax take lags growth but the growth numbers are improving and the borrowing requirement remains stubbornly large.
The Office for Budget Responsibility "OBR" is currently forecasting that it will not be until 2018-2019 that the government will achieve a surplus and then only just under £5bn.
It is highly likely that property taxes will be increased, after all we have limited options to generate more tax (basically income, corporate profits, consumption (VAT), wealth and property).
The Annual Tax on Enveloped Dwellings "ATED" - basically residential properties owned by companies rather than directly by individuals is an easy target - see http://www.hmrc.gov.uk/ated/basics.htm#1 for detailed definition.
The threshold is being reduced (from £2m now to £500,000 from fiscal 2016) and I expect that the annual charge will be raised, possibly substantially and possibly even to a level where it would be more economical for the company to sell the property to the shareholders resulting in individual ownership (which is what the government probably intended in the first place).