Britain May Tax Foreign Property Investors

By ExpatBriefing.com Editorial 28 November, 2013

British Deputy Prime Minister Nick Clegg said on November 18, 2013 that the government is planning to impose a capital gains tax (CGT) on sales of British houses by foreign owners.

The measure is a response to fears of a housing bubble, particularly in London, where prices rose more than 10 percent in a year, largely due to demand from Russian and Middle Eastern investors.

The government is reviewing the proposal ahead of Chancellor George Osborne's Autumn Statement on December 05, but no decision has yet been reached, Clegg told a news conference.

"We certainly need to make sure that people who invest very large amounts of money into property in central London locations...pay their fair share of tax in those transactions. That is why we are looking at options like a differential application of capital gains tax to those kind[s] of transactions," he said.

Currently foreign investors are exempt from the CGT which Britons have to pay (usually at 28 percent) on any profit from the sale of property which is not their primary residence.

Mr Osborne has been hesitant about imposing CGT on foreign property owners, fearing that it might deter investors from coming to the United Kingdom. However, this concern has been somewhat allayed by the way in which London's property market has continued to grow despite the imposition of a new 7 percent top rate of stamp duty on homes worth over GBP2m.

Tags: Capital Gains Tax (CGT) | Tax | Investment | Real-estate Investment | Real-estate | United Kingdom | Expats |

 





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