High stamp duty charges risk deterring labour market mobility among senior executives, according to a new analysis
High stamp duty charges may be deterring senior executives from moving to the UK, according to a new study by UHY Hacker Young.
In a study of equivalent tax regimes in 26 countries, the accountancy group found that the UK charges significantly higher taxes on personal property than many of its western European neighbours, and many global advanced economies.
While buying a property in the UK worth $1m (£762,747) leaves the purchaser with a charge of $35,400, buyers in Japan, America, China, Ireland and the Netherlands all faces smaller bills.
While rates varies in different states, the US levies an average charge of just 0.6 per cent, or $5,970 on a $1m property, while Canada charges just 1.8 per cent.
However, charges in the UK remain dwarfed by taxes in France, Germany and, highest of all, Belgium, where a $1m property nets a tax of 11.3 per cent, and a bill of $113,131.
UHY Hacker Young head of private client services Mark Giddens said: "If businesses have to offer much greater incentives for senior executives to relocate, this could have a serious impact on job creation and business investment, and ultimately on the wider economy.
"The issue of labour mobility is particularly pressing due to the uncertainty created by the recent Brexit vote."
THE FULL LEAGUE TABLE
|
Rank |
Country |
Rate** |
USD Amount |
|
1 |
Belgium* |
11.3% |
$113,131.00 |
|
2 |
Spain |
8.0% |
$80,000.00 |
|
3 |
Pakistan |
6.0% |
$60,000.00 |
|
4 |
France |
5.1% |
$50,900.60 |
|
5 |
India |
5.0% |
$50,262.60 |
|
6= |
Croatia |
5.0% |
$50,000.00 |
|
6= |
Germany |
5.0% |
$50,000.00 |
|
6= |
Malta |
5.0% |
$50,000.00 |
|
9 |
Australia**** |
4.8% |
$48,155.50 |
|
10 |
Uruguay*** |
4.0% |
$40,000.00 |
|
– |
Europe Average |
3.8% |
$38,355.94 |
|
11 |
UK |
3.5% |
$35,382.68 |
|
– |
World Average |
3.3% |
$33,037.99 |
|
12 |
Japan |
3.0% |
$30,135.00 |
|
– |
G7 Average |
3.0% |
$29,562.09 |
|
13 |
Israel |
2.7% |
$27,368.30 |
|
– |
BRIC Average |
2.3% |
$22,719.71 |
|
14 |
Denmark |
2.1% |
$21,000.00 |
|
15 |
China |
2.1% |
$20,585.80 |
|
16 |
Poland |
2.0% |
$20,019.40 |
|
17= |
Brazil |
2.0% |
$20,000.00 |
|
17= |
Mexico |
2.0% |
$20,000.00 |
|
17= |
Netherlands |
2.0% |
$20,000.00 |
|
20 |
Canada**** |
1.8% |
$17,833.33 |
|
21 |
Italy*** |
1.7% |
$16,713.00 |
|
22 |
Rep of Ireland |
1.0% |
$10,000.00 |
|
23 |
USA**** |
0.6% |
$5,970.00 |
|
24 |
Romania |
0.2% |
$1,500.00 |
|
25 |
Russia |
0.0% |
$30.45 |
|
26 |
New Zealand |
0.0% |
$0.00 |
* This figure represents an average of the rates in Brussels, Flanders, and Wallonia which can vary from 9.8% to as high as 12.5%.
**Rates rounded to nearest tenth
***Rate paid on cadastral value of property, not market price; for Italy (based on 2015 data), it includes the law with the provision that the rate applies on the cadastral value of the property, which is largely lower than the market price
****Average of local variations