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New tax on second homes likely to hit returning Brit expats
| Published: | 23 Oct at 6 PM |
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Expats who return to the UK post-Brexit are likely to be hit with unexpected property taxes.
PM Theresa May’s new surcharges in addition to stamp duty on buy-to-let and second homes may spell bad news for former UK expats who’ve returned to the UK due to Brexit uncertainty. The British government is expected to debate the plan’s details, but May is pushing the scheme as a solution to aid UK taxpayers struggling to afford the UK’s at present overpriced homes. The new tax is expected to apply to ‘foreign buyers’ so would hit UK expats attempting to purchase a home in preparation for a return to the UK.
At present, stamp duty on buy-to-let properties and second homes is set at three per cent for properties valued at £125,000 or less, five per cent on valuations of between £125,000 and £250,000 and eight per cent on homes costing over £250,000 up to £925,000. According to a leading accountancy firm’s representative, it’s not just citizens of overseas countries and expats investing in buy-to-let properties who will be affected, as ‘citizenship’ isn’t a relevant concept as regards UK tax laws.
Confusion also seems to reign amongst media outlets and the Tory party, as the latter’s official tweet states the ‘higher rate of stamp duty’ will apply to non-UK residents, whilst an announcement from the PM says ‘foreign buyers’ will face a higher stamp duty rate. An HM Treasury quote adds that consultation on the details of the new tax will take place in due course, a comment which isn’t a great deal of help for British expats who’ve decided to return to the home country before the end of next March.
According to the PM, the money raised by the new tax will be used to fund much-needed services for homeless people, and it’s expected that returnees would wish to rent at first before finding a suitable property and would therefore not be considered foreigners. However, given the massive increase in rental charges across the UK, British retirees on state pensions and unable to sell their overseas properties before their return to the UK might very well find themselves in the ‘homeless’ category supposedly targeted for assistance via the new tax.
PM Theresa May’s new surcharges in addition to stamp duty on buy-to-let and second homes may spell bad news for former UK expats who’ve returned to the UK due to Brexit uncertainty. The British government is expected to debate the plan’s details, but May is pushing the scheme as a solution to aid UK taxpayers struggling to afford the UK’s at present overpriced homes. The new tax is expected to apply to ‘foreign buyers’ so would hit UK expats attempting to purchase a home in preparation for a return to the UK.
At present, stamp duty on buy-to-let properties and second homes is set at three per cent for properties valued at £125,000 or less, five per cent on valuations of between £125,000 and £250,000 and eight per cent on homes costing over £250,000 up to £925,000. According to a leading accountancy firm’s representative, it’s not just citizens of overseas countries and expats investing in buy-to-let properties who will be affected, as ‘citizenship’ isn’t a relevant concept as regards UK tax laws.
Confusion also seems to reign amongst media outlets and the Tory party, as the latter’s official tweet states the ‘higher rate of stamp duty’ will apply to non-UK residents, whilst an announcement from the PM says ‘foreign buyers’ will face a higher stamp duty rate. An HM Treasury quote adds that consultation on the details of the new tax will take place in due course, a comment which isn’t a great deal of help for British expats who’ve decided to return to the home country before the end of next March.
According to the PM, the money raised by the new tax will be used to fund much-needed services for homeless people, and it’s expected that returnees would wish to rent at first before finding a suitable property and would therefore not be considered foreigners. However, given the massive increase in rental charges across the UK, British retirees on state pensions and unable to sell their overseas properties before their return to the UK might very well find themselves in the ‘homeless’ category supposedly targeted for assistance via the new tax.
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