Wednesday 15 August 2018

The Chancellor’s Autumn Statement 2013 and consequences for foreign property buyers in the UK

Some measures in the Autumn Statement, such as Capital Gains Tax (CGT) for foreign owners, and a boost for regional cities were expected but there was disappointment that the Chancellor had not done away with stamp duty on lower priced property sales.

The Chancellor’s Autumn Statement 2013 and consequences for foreign property buyers in the UK

There is some speculation that CGT to be paid by foreigners selling UK property may be an alternative to the 'Mansion Tax'. George Osborne by Eddie Mulholland.

December 7, 2013

The Chancellor’s decision to impose CGT on wealthy foreigners selling their property in the UK however, will be seen by many Britons as long overdue and positive news, especially as UK residents selling second homes have long been required to pay the tax.

As from April 2015, Mr Osborne has decided to make overseas investors pay capital gains tax of 28 per cent on the profit they make when they sell their UK properties.

The tax will also apply to British non-residents.

Even some property agents in the London have said they see the tax as reasonable as such a large proportion of buyers in the Capital are from overseas.

Estate agents were quoted in an article in the Daily Telegraph as saying the tax doesn’t substantially alter the rationale for buying in London, as it is the safe political and economic position of the city which is the driving force behind non-resident property investments.

In the same article Liam Bailey, head of Knight Frank Global Research said: “It will have only a marginal impact on demand and pricing, [and] brings the UK in line with other key investor markets such as New York and Paris, where equivalent taxes can approach 35-50 per cent”.

Lucian Cook, head of UK residential research at Savills estate agents said the move was positive and “this is the least worst outcome for prime London and means that there will be no mass sell-off as foreigners crystallise past gains, and little incentive to exit or not buy into the London market going forward.”


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