Do politicians use real estate markets as cash cows?

Do politicians use real estate markets as cash cows?

Do politicians use real estate markets as cash cows?

Even though the worldwide economy is still struggling to pull away from the 2008 downturn many property markets have performed admirably since the problems of 2008. Indeed area such as London have now topped their previous high of 2007 moving into uncharted territory with many domestic investors now priced out of the market in favour of foreign parties. However, amid ongoing austerity measures across the world there is growing concern that politicians and governments are using real estate markets as their cash cows.

Do you think we are being a little unfair to politicians or are real estate investors being milked to fund budget deficits?

Mansion tax

If we look towards one of the more buoyant real estate markets in the world, that of London, we have seen enormous growth since the troubles of 2008. Indeed London property prices have now reached an all-time high topping their previous peak of 2007 just before the worldwide recession. While much of this has been as a result of foreign investment in London property there is no doubt that many domestic buyers have also done very well.

Quote from “Which property markets are you targeting for 2015?”

Politicians are now looking to introduce yet more taxation for UK property buyers with a Mansion tax discussed by the Labour Party and even the Conservative Party now looking at ways to raise more capital from real estate. The fact remains that houses of all sizes already pay a significant amount of money to their local authorities and much of this is already based upon the size and value of the property. Why introduce yet another tax for no apparent reason?

Scottish property tax

The Scottish government recently introduced a new property tax to take over from stamp duty which has in some cases seen duty rates increase fivefold. There are serious concerns that not only will the amount of money raised be far less than the authorities forecast but indeed this could lead to stagnation in the Scottish property market in the short to medium term. Again, with the SNP constantly criticising Westminster and its austerity measures, it seems that the wealthy of society are yet again being forced to cover mismanagement by the Westminster and the Scottish government.

Australian foreign investment fee

The Australian government is looking to introduce a potential $1500 fee per property for all foreign investors looking at Australian real estate. There is a suggestion that this could raise around $50 million per annum which would be used to beef up the country’s real estate compliance department. It is highly unlikely that the vast majority of funds raised will find their way to the compliance department as they will more likely be used to prop up additional expenditure by the Australian government as a means of keeping the voting public onside.


There are very few countries in the world that do not use the real estate market as a means of milking more and more cash to prop up their ailing budgets. Yet again, it is the wealthy of society who are expected to pay more towards financial mismanagement by many governments and politicians. Bashing the rich seems to be a very simple way of raising more funds and currying favour with the working public, even though very often ambitious forecasts for additional funds are nowhere near those raised in real life.

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