Stamp duty plans for foreign investors outlined
Plans have been announced for a new stamp duty on property investors from outside the United Kingdom.
Prime Minister Theresa May has said that foreign buyers would face a new charge on purchases, although the exact figure – thought to be between 1% and 3% – has yet to be decided.
However, the proposals have been described as “sensible and measured” by the Association of Accounting Technicians (AAT), and an accurate reflection of how attractive the UK market – particularly the north-west of England – is to global investors.
“Put simply, it doesn’t matter how many houses are built in the UK, there will never be enough to meet demand because demand is not simply coming from the 65m currently resident in the UK but from across, Europe, Asia and America,” said Phil Hall, Head of Public Affairs for AAT.
“Years of London property purchases from Russia, China, America and various other countries are well documented but it’s not just London that overseas investors are setting their sights on. Liverpool, Manchester and other parts of the UK are proving equally attractive.
“Middle income earners from across the world, especially China, Malaysia and Singapore, are finding UK property an increasingly attractive proposition.”
The Prime Minister told the BBC’s Andrew Marr Show that, “the money we raise from this extra stamp duty is going to be spent on dealing with the issue of rough sleeping.”
Overseas buyers to pay CGT from April
Recent figures from Emoov show that demand for property in the UK remains strong, with an increase of 39% in the third quarter of 2018, up 6% year-on-year.
Overseas investors will have to pay capital gains tax (CGT) of around 9% on all profits from commercial property sales from April 2019, a move announced in last year’s Budget.
“We are going to consult on the figure but around 1%; we are going to consult to see if that’s the right figure,” Conservative Party chairman Brandon Lewis told Sky News.
“This isn’t going to solve the housing supply problem but it’s a sensible and measured response to an increasing problem that will also raise £40-£120m and add a degree of previously absent fairness to the system,” added Phil Hall.