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UK expats to be charged stamp duty on British property purchases
| Published: | 5 Oct at 6 PM |
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As part of a move by the British government to ease the UK’s worsening housing crisis, UK expat buyers of property in Britain will now be charged stamp duty.
The reason for the extension of the unpopular tax to expat property purchases is the belief that non-resident British buyers are using house purchase purely as an investment, a move which is pushing up prices nationwide. Although the proposal has yet to go for consultation, it’s certain that expatriate buyers will be charged at a rate of between one and three per cent of the agreed purchase price.
According to research by York University, around one in every eight new-build homes in London were sold to foreign buyers from 2014 to the end of 2016, denying British residents the chance of getting on the property ladder. A further study carried out by Kings College London found a one per cent increase in the number of properties purchased by overseas companies caused a price increase of 2.1 per cent in the capital, thus making London properties even less affordable for Londoners.
Foreigners buying into the UK housing market already pay three per cent stamp duty on properties in England and Wales. In addition, research by major London-based property consultants reveals just over two thousand homes were purchased last year by foreigners for a total amount of over £2 billion, with half of the properties located in prime Central London districts. The new rule is expected to raise £120 million in taxes, but is expected to have a detrimental effect on the London property scene, especially as regards new developments.
The reason for the extension of the unpopular tax to expat property purchases is the belief that non-resident British buyers are using house purchase purely as an investment, a move which is pushing up prices nationwide. Although the proposal has yet to go for consultation, it’s certain that expatriate buyers will be charged at a rate of between one and three per cent of the agreed purchase price.
According to research by York University, around one in every eight new-build homes in London were sold to foreign buyers from 2014 to the end of 2016, denying British residents the chance of getting on the property ladder. A further study carried out by Kings College London found a one per cent increase in the number of properties purchased by overseas companies caused a price increase of 2.1 per cent in the capital, thus making London properties even less affordable for Londoners.
Foreigners buying into the UK housing market already pay three per cent stamp duty on properties in England and Wales. In addition, research by major London-based property consultants reveals just over two thousand homes were purchased last year by foreigners for a total amount of over £2 billion, with half of the properties located in prime Central London districts. The new rule is expected to raise £120 million in taxes, but is expected to have a detrimental effect on the London property scene, especially as regards new developments.
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