Simon Jenkins on top form, sort of.

Via Carol W, Simon Jenkins in The Guardian:

Three of the most expensive homes in the world have been sold recently, and to one man. He is the American hedge-fund billionaire Ken Griffin. One will overlook Buckingham Palace at Hyde Park Corner and will cost £100m. Another is a new townhouse across the park at Carlton House Terrace, costing £95m. The third is a penthouse atop a “pencil block” at New York’s 220 Central Park South, costing $238m (£200m). All have been eulogised as “stunning”.

Something else is stunning, but is not reported [sic]. The property tax that Griffin will pay to New York on his £200m home will be at least an eye-watering $280,000 a year. But dry the starting tear. He can afford it. Instead, switch to London. Here the sum total of what Griffin will pay Westminster for his pieds-a-terre is just £2,842 – that is the council tax on two H-band properties.

While $280,000 seems like a lot of money (and it is), that's still barely 0.1% of the selling price of his Manhattan flat. £2,842 is simply not a lot of money, and only 0.003% of the selling price.

So far so good (or bad).

Sort of...

What Jenkins doesn't mention is that Mr Griffin must have paid about 15% SDLT when he bought his London house. New York has a 'Mansion Tax' of 1% payable by the buyer and a transfer tax of 1.4% payable by the seller (as far as I can see) i.e. a lot less.

So it will be a long while before the total taxes paid on the purchase and ownership of the Manhattan flat catch up with the SDLT Mr Griffin paid up-front on his London house.

What we don't know is whether Mr Griffin will end up paying the ATED charge on his London house, which would be a princely £232,350 a year.

Either way, the UK is actually clawing back a lot more of the location value than Jenkins' article suggests, it's just doing it in a really stupid way, by using a transaction tax (or ATED with arbitrary bands) instead of an annual Land Value Tax.