Property Price Hikes in UK As Bad As 10% Tax
April 27, 2016 Taxation in UK
LONDON – Rocketing property prices in the UK are hurting taxpayers as much as a GBP 1 500 tax hike.
The rising costs of housing in the UK have the same financial impact on households as a 10 percent rise in taxes, according to the results of new research conducted by the UK think tank Resolution Foundation.
It was noted that while the prices of accommodation in the UK fell immediately following the Global Financial Crisis in 2008, the costs are now back on the rise.
The cost of housing now has risen back up to pre-crisis levels, a period which was regarded as being an unsustainable bubble characterised by rapid growth in prices.
On average, a wealthy household in the UK expends approximately a fifth of its income on accommodation each year, while middle- and low-income households spend between 25 percent and 26 percent per year.
Renters spend an even larger portion of their income on accommodation, with total outlays rising as high as one third of their income.
It was noted that since 1994 the average expenditure on housing as a portion of income has risen by 10 percent.
For an average dual-income family, the rising housing cost is the equivalent of a 10 percent hike to the rat on personal income tax, resulting in the loss of an extra GBP 1 500 per year.
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