The Institute for Fiscal Studies is analyzing the Labour Party’s ability to raise taxes. The Labour Party has planned an additional 15 percent on offshore companies purchasing residential property in the UK. The party claims it will raise €1.6 billion a year while the IFS claims the tax will not raise any money. Based on other countries increasing the taxes on foreigners owning residential property, the IFS does not believe it increases demand. The IFS also claims that foreign companies can move to countries that do not have taxes on owning offshore property.
- The IFS believes that a levy on offshore purchases of property will return no profits.
- The IFS bases their opinion by using experiences of foreign countries wherein higher taxes on foreign ownership of residential property did not impact demand.
- The IFS data fails to take in to account the amount of offshore purchases of UK property that could bring in £256 billion.
“Labour has proposed an addition levy of 15 per cent, i.e. on top of everything that is in place now, on residential property purchased in the UK by offshore companies.”