UK has highest property tax burden of top economies, says report

The UK has the highest commercial property tax burden of any major economy, according to a report.

The findings from global tax firm Ryan’s annual business rates review comes as thousands of UK companies prepare for a jump in their rate payments for the next year.

The report, published on Monday, found that the UK ranks first globally for the property taxes as a share of gross domestic product (GDP).

Experts indicated that the high tax burden could impact on plans for investment across UK firms.

It also found the UK ranked second for total property tax revenues, according to analysis of the latest available comparable international data.

The findings come as business rates receipts are forecast to rise to £37.1 billion across the UK for the 2026/27 financial year, up from £33.6 billion the previous year, following the revaluation of business rates in England, Wales and Scotland.

The Government announced targeted business rates support for pubs and music venues, but many other sectors, such as hotels, have warned over predicted rises in their property tax bills.

Alex Probyn, practice leader for Europe and Asia-Pacific property tax at Ryan, said: “The UK sits at the very top of global rankings for property tax.

“That is not a marginal difference but it reflects a system where property is taxed more heavily than in any other comparable economy.

“The result is that business property is carrying a disproportionate share of the overall tax burden, and that is beginning to weigh heavily on investment, particularly in sectors that rely on physical assets and long-term capital.”

Ryan’s analysis shows property tax receipts continue to rise because of inflation-linked increases, policy changes and the withdrawal of pandemic-era reliefs.

Mr Probyn added: “Property taxes in the UK are the highest by international standards, and the system is designed in a way that continues to increase the yield over time.

“That creates a clear tension between the need to raise revenue and the need to support investment. That balance has to be addressed.”