The British real estate group Winkworth announced that the demand for high-end properties had been affected by tax policies targeting wealthy individuals and a proposal from the new Labour government to tax private schools.
Due to Britain's tight national finances, there has been limited ability to invest government funds in improving public services. Consequently, successive governments have explored ways to increase taxes on those who have chosen Britain, particularly its lucrative property market, as a place to store their wealth.
With the new Labour government pledging to tighten tax loopholes that often benefit the super-rich, private banks and advisers have indicated that some wealthy individuals might leave the country entirely.
In a trading announcement for the first half of 2024, Winkworth reported that overall sales had increased by 19% compared to H1 2023, but noted some impact on the higher end of the market. The statement attributed this to the Conservative Party's removal of non-domiciled status, the Labour Party's plan to add VAT to private school fees, and the higher cost of finance.
Labour, whose election victory last week had been widely anticipated, intends to remove an exemption for non-state-run schools, which currently allows them to avoid charging a 20% Value Added Tax (VAT) on the fees they receive. These schools, often favored by the wealthy, could now become more expensive.
