The UK has the highest level of property taxes of any major economy in the world as a share of the economy, according to new analysis, with new business reforms only set to add to the load.
The global tax firm Ryan said the UK suffered a heavier property tax burden than the likes of France and Canada.
Ryan’s 2026 review found property taxes in the UK as a share of GDP was 3.7 per cent, ahead of France and Canada at 3.4 per cent.
Britain was second only to the US in absolute property tax revenues, generating $136.2bn (£102bn) compared to America’s $854.6bn (£640bn).
The UK also ranks third globally for property taxes as a share of total revenues, at 10.9 per cent, behind the US and South Korea.
Labour’s reforms on business rates are set to add to the load as business rates receipts are forecast to hit £37.1 billion in 2026/27 – a rise of more than £3.5 billion in a single year.
Property tax burden to become heavier
The findings add to what has already been identified in separate research. Researchers at the Adam Smith Institute found that the UK was the second least competitive OECD country for property taxes, above only Italy.
Researchers said the UK had the second-lowest average rate of gross fixed capital formation as a share of GDP in the OECD, reflecting struggles to pile cash into new buildings and infrastructure.
Alex Probyn, who specialises in property tax at Ryan, said the gap with international peers was a “structural issue” as business rates would “increase the yield” on tax receipts each year.
“That creates a clear tension between the need to raise revenue and the need to support investment. That balance has to be addressed.”
He added: “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.”
Revenue streams included in the data are council tax, stamp duty and business rates.
Rachel Reeves has increased taxes in each of the three areas over her first two Budgets as part of a cumulative £66bn rise in government receipts.
Shadow chancellor Sir Mel Stride said the figures “expose the harsh reality of Labour’s high-tax economy: the highest property tax burden in the developed world, crushing investment, punishing enterprise, and holding back growth”.
A government spokesman said: “We have the right economic plan – we’re backing the high street by reforming business rates, with a £4.3bn support package to limit bill rises, capping corporation tax at 25 per cent, cutting red tape and taking action on the cost of living to boost the sector.”