Rents and property taxes – who gains from low property taxes?

During the 1980s, the government introduced what were called Enterprise Zones, where no property tax was payable. The scheme was carefully monitored by consultants Cambridge Econometrics. The conclusion was

“that 100% of the benefits from NNDR relief are passed into rents and therefore accrue to landlords although the range of uncertainty surrounding this statistical estimate puts the boundary at somewhere between 65% and 150%. Either way, the general conclusion is that the majority of tax-saving benefits from NNDR exemption on EZs accrued to landlords rather than to tenants. … “

This is a link to the report by Cambridge Econometrics. It was commissioned for HMRC. The findings are exactly as could have been predicted and indeed were predicted by members of the Campaign, amongst others.

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