Why Property Taxes Hurt the UK Economy – From Building Sites to Carpet Tubes

The UK economy is built, quite literally, on bricks, mortar and everything that supports them. Every extension, office refit and housing development sets off a chain reaction of activity: builders, electricians, plumbers, carpet fitters, haulage firms, manufacturers – and yes, even specialist suppliers of carpet tubes and industrial cores.

That’s why the debate about stamp duty, capital gains, “mansion taxes” and other levies on property isn’t just a Westminster talking point. When property is taxed heavily, construction and renovation slow down – and a huge slice of the UK economy feels it.

How property taxes put the brakes on building

Taxes that bite hardest when you buy or own property – such as stamp duty or a mansion-style tax on higher-value homes – tend to do two things:

1. They discourage people from moving.

   Buyers think twice about paying tens of thousands in tax just to move house. Fewer moves means fewer “we’ve just moved, let’s sort the place out” projects: new kitchens, bathrooms, loft conversions and garden makeovers.

2. They make marginal building projects unviable.

   Developers and investors work on tight margins. Extra taxes or charges can be the difference between “go ahead” and “scrap the scheme”. When a block of flats or a housing site doesn’t get built, years of work for tradespeople and suppliers disappear with it.

A mansion tax can sound like something that only touches a small group of wealthy homeowners, but the real impact spreads far beyond a few postcodes. High-value properties sit at the top of long economic chains: they generate work for architects, planners, specialist builders, heritage trades, interior designers, flooring contractors, and the manufacturers and distributors that supply them – from high-end joinery and stone to carpets, packaging, carpet tubes and industrial cores. When an annual mansion tax makes it more expensive to buy or hold those homes, owners delay major refurbishments, developers cancel or downsize schemes, and investors redirect money into lower-tax assets.

Media coverage has already highlighted how owners look for ways to “devalue” or reclassify their properties to fall under proposed thresholds – letting buildings run down, carving off land, or aggressively challenging valuations – all of which means less genuine investment in the housing stock. That, in turn, means fewer projects, fewer tenders, fewer hours for tradespeople and less throughput for factories and hauliers that rely on this work, as well as weaker returns for pension funds and savers with exposure to property. A tax that is designed to look narrowly targeted on “the rich” therefore ends up quietly reducing activity and job opportunities right down the supply chain, including for ordinary workers and SMEs who never go near a “mansion” themselves.

From the outside it looks like a slowdown in house sales. On the ground it means quieter diaries for joiners, sparkies, plumbers, decorators, carpet fitters, and the many manufacturers and distributors that supply them – including UK makers of industrial cores for flooring, films and packaging.

How much of the UK economy depends on construction and renovation?

Construction on its own contributes about 6–7% of UK GDP, based on the way the Office for National Statistics measures output. On top of that, UK households are spending in the region of £60 billion a year on repair, maintenance and improvement of their homes, with roughly £40 billion of that work contracted out to builders, trades and specialist firms – equivalent to around 2% of national output just from owner-occupiers’ housing projects.

Once you add in landlords, commercial buildings and the wider supply chain – from building materials to flooring, packaging, carpet tubes and industrial cores – it’s no stretch to say that close to 10% of the UK economy is touched directly by construction and renovation activity.

Every time policy makes it harder or more expensive to move, build or refurbish, it’s that 10% slice of the economy that takes the hit.

The hidden role of carpet tubes and industrial cores in the build cycle

At Just Paper Tubes, we sit in a part of the construction ecosystem most people never think about – but which every project relies on.

Our carpet tubes and industrial cores are used throughout the build and renovation process:

• Flooring and carpets

  • Every roll of carpet or vinyl flooring needs a strong, reliable carpet core to keep it straight and damage-free in transit and on site. If fewer homes are built or refurbished, fewer rolls are ordered and fewer cardboard carpet tubes are used.

• Protective films and foil

  • Industrial cores carry the plastic films and foils used to protect windows, doors, worktops and freshly painted surfaces, as well as vapour barriers and membranes in modern building systems.

• Packaging for construction materials

  • Adhesive tapes, wraps and flexible packaging rely on high-performance cardboard cores. These products keep materials dry, protected and traceable from factory to site.

• Industrial processes linked to construction

  • Steel mills, paper mills, plastics and textile manufacturers often supply directly into the construction and interiors markets. Their lines run on industrial cores and tubes just as much as their customers’ products do.

When property taxes reduce the volume of building, refitting and refurbishment, the impact ripples all the way back to specialist manufacturers like Just Paper Tubes – and to the local jobs we support.

Why higher property taxes are the wrong lever for growth

There is, of course, a legitimate debate about how to raise revenue and how to make housing fairer. But loading ever more tax onto property transactions and ownership has some clear downsides:

• It hits investment and jobs, not just “paper wealth”.

  • The people who feel it quickest are tradespeople, small builders and the supply chain that serves them – not just owners of expensive homes.

• It doesn’t fix the root problem: supply.

  • The UK needs more, better-quality homes and commercial spaces. Measures that deter building and renovation only make shortages worse.

• It creates a stop–start cycle.

  • Every time tax policy changes, the market stalls while buyers, sellers and developers regroup. That uncertainty is tough for SMEs planning staffing, apprenticeships and capital investment.

A healthier approach would be to encourage productive investment in the existing stock – especially energy-efficient retrofits – and to tackle land and planning bottlenecks, rather than penalising the act of moving or improving.

What this means for businesses like Just Paper Tubes

For manufacturers embedded in the construction and interiors supply chain, stability and confidence in the market matter just as much as headline growth.

When building and renovation are thriving:

• Flooring contractors are busy, ordering more carpet and vinyl – and more carpet tubes.

• Distributors and merchants are shifting higher volumes of product on industrial cores, from tapes to films and foils.

• SMEs like Just Paper Tubes can invest in new machinery, improve sustainability and create skilled jobs in their local communities.

When property taxes dampen activity, all of that becomes harder. Idle capacity, delayed investment and lost opportunities follow – not just for us, but for thousands of similar businesses across the UK.

Conclusion: small components, big picture

Property taxes can look like an easy way to raise money. But the true cost is paid in quieter building sites, fewer renovations, stalled careers in the trades and weaker order books for suppliers.

From the outside, a carpet tube or industrial core is just a piece of cardboard. In reality, it is a small but essential part of a much bigger economic machine – one that employs millions of people and keeps money circulating in communities up and down the country.

If we want a stronger, greener, more dynamic UK economy, we need policies that unlock construction and renovation – not ones that quietly hold them back.