Analysis by global tax and software firm Ryan of OECD’s data (Organisation for Economic Cooperation and Development) has revealed that the UK has the highest property tax burden in the developed world and it is distorting the housing market.

That’s even before next week’s rises in Stamp Duty and Council Tax.

The average developed country pays 2.7%  of its gross domestic product (GDP) in property taxes. In the UK, it is more than a third higher at 3.7%.

The next highest levels of property taxation are in Luxembourg and France – both at 3.5%. Canada comes fourth at 3.4% and Korea fifth at 3.3%.

200% rise

And, from April, the average Council Tax bill will rise by 5% but second home-owners are facing a 200% rise.

Research by the Times newspaper shows cash-strapped councils are primed to take advantage of the new rules for taxing second homes and are likely to double their tax take from them from £549m to £1.02 billion in 2025.

Its impact on the housing market can already be clearly seen, with coastal home prices down by 10% and, according to Savill’s Lucian Cook, demand for second homes has fallen dramatically.

To add to that, April’s rises in Stamp Duty have led to warnings from property experts of a cliff edge in house buying activity, especially for first-time buyers, for whom that first step on the ladder will seem even further out of reach.

This chronic lack of affordability is about to get even worse.”

Stuart Haire, CEO of Connell’s owners Skipton Group says: “The first step onto the property ladder remains by far the hardest with almost 90% of potential first-time buyers across Great Britain being unable to afford to get on the property ladder without additional help.

“This chronic lack of affordability is about to get even worse.”

With the UK’s economy wobbling and Rachel Reeves under pressure to make cuts, there are unlikely to be any reductions in property tax for some time to come.