Patrick's Property Politics

A Smorgasbord Sh*t Show

Monday 1st December 2025

Could the solution be a Royal Commission on UK Tax?

What a shabby shambles from ‘Wretched Rach’ and her Treasury brown-nosers.

The run up to the budget was quite simply a disgrace. Her deceitful pre-budget statements may mean she ought to resign. She won’t go willingly but the debacle will surely speed her demise.

The Central London property market froze for nearly half a year with all the threatening kites that were flown. Businesses generally have been holding off any significant decisions.

This cannot be allowed to happen again.

George Osborne introduced the OBR supposedly to deal with the gross politicisation of budgets in the Gordon Brown era. He then went on to use it as a cover for his own poor tax policies and Treasury’s tinkering.

It should be understood it is simply another Quango, directly funded by HM Treasury. Not really ‘independent’ at all.

Since its inception in 2010, the OBR has been wrong in all of its predictions and it has been used ever since for Chancellors to duck difficult decisions.

Slathering icing on the cake, it leaked the full budget 45 minutes before ‘Wretched Rach’ stood up to deliver it before Parliament.

The Chair of the OBR Richard Hughes has resigned which is the honourable thing to do.

However, my view is the OBR itself should be disbanded straight away. The Treasury and Chancellor need to be directly accountable to Parliament and the country in future.

To London property!

On the surface the tax increases in the Budget seem more benign than had been feared.

A ‘progressive’ ‘mansion tax’ on properties above £2m has had the press and commentators predicting significant price drops at the higher levels.

Poppycock - as Boris would say.

Take a £3m house which will suffer a per annum extra council tax of £3,500.

In these high Stamp Duty days, how long does a family house stay in one ownership?

Let us say 20 years.

£3,500 pa x 20 yrs = £70,000.

£70k off a sales price at this level should be the absolute maximum caused by this tax. With this discount a purchaser would get 20 years of credit from the seller. Too much really.

At this level, people are clued-up. They will see this tax calculation for what it is.

Whilst completely distorting, our property taxes are still pretty reasonable by international standards.

There may be many reasons to discount prices - such as more supply as wealthy people leaving the country in the face of our high tax low growth economy - but the extra council taxes should have marginal effect.

The extra 2% on property income, savings interest and dividends, is probably more painful for savers and shareholders than for our London landlords. They are mostly 40% and 45% taxpayers who will now pay 42% and 47% on their property profits but they would on other investments too.

The most hit landlord will be those who are retired and relying on their one or two let properties for the majority of their income. Generally, the nicest ones, they will see a 10% increase in their property income tax from 20% to 22%.

Tenants will suffer from more landlords selling, creating a greater shortage of supply and even higher rents.

Well done Rachel.

Anyway, in the real world, we prefer a solution over whinging.

With over 35 years’ experience in London property, I have come to understand that the taxes drive behaviour.

Property taxation is now an utter mess. Our whole tax system is bloated beyond belief.

Some are now suggesting a Royal Commission to look at the whole system. I agree with the principles of having a cross-party consensus which this might bring. However, we would have to wait for the next Govt. to even get one instigated, plus Royal Commissions generally take years to opine.

No.

The shortest route to success, is for both the Tories and Reform - separately or together, I don’t care which - to come up with comprehensive plans to overhaul our gargantuan tax system.

Not the exact rates of tax - which require a political view - but structural cleansing and simplification.

If both these parties create plans for tax simplification, as they seem inclined to do, then at the next election, whether either one gets an outright majority or they are forced into coalition, there will be a be clear electoral mandate to deal with the tax issue.

UK taxpayers are desperate for a strong simple system. A party with a bold clear policy on this topic will get many more votes.

Treasury officials and accountants who set up and love the current system should be banned from this process.

I am not joking.

Treasury mandarins are too politically partisan and their teams addicted to fiddling.

Accountants have a horrible, vested interest in maintaining the most complex system possible, so they can sell their services.

Have you heard the Hargreaves Lansdown radio adverts in the run up to the Budget?!

For the property taxes especially, I am happy to volunteer to help either or both parties.

Until next time……