Osborne Said To Be Considering Tax For Foreign Property-Buyers

By ExpatBriefing.com Editorial 05 November, 2013

UK Chancellor George Osborne has declined to confirm reports that the Government is considering moves to make foreign investors pay Capital Gains Tax on property sales in Britain, as a measure to calm property prices in London.

Asked by the BBC, Osborne said that he would not comment ahead of next month's Autumn Statement, but that the reports were "not a leak that's come from anyone near me."

Currently, foreign investors are exempt from paying the tax, which is imposed on UK residents who sell a property that is not their main residence. The exemption has been described as an "extraordinary anomaly" by Vince Cable, who is the Government's Business Secretary and a member of the Coalition Government's junior partner, the Liberal Democrats.

Lucian Cook, who is Director of Residential Research at estate agency Savills, judged that move would be a "much more targeted and much less controversial solution" to property prices than a proposed Mansion Tax on the most valuable properties. However, the British Property Federation (BPF) reacted by warning that reports about the tax would cause uncertainty, and it has instead called for more homes to be built.

Estate Agency Frank Knight was quoted as saying that around 70 percent of the most expensive new London properties have gone to foreign investors, and that 65 percent of these buyers were buying properties for renting out rather than to live in. Property prices in London rose by 9 percent in August, against a national average of 2 percent.

Overseas purchasers are also thought to be responsible for house prices rises in Hong Kong, Sydney, and Vancouver. Last year, Hong Kong introduced a 15 percent stamp duty surcharge on purchases by buyers who are not permanent residents, while a senior banker in Australia recently made news by suggesting a 5 percent stamp duty surcharge for foreign buyers.

Tags: Capital Gains Tax (CGT) | Tax | Real-estate | United Kingdom | Ministry Of Finance | Tax Rates | Expats | Investment | Property Investment | Invest | Investment |


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