Conservatives to impose stamp duty surcharge for non-UK residents
The Conservatives plan to impose a three per cent surcharge on stamp duty for non-UK tax residents purchasing properties in England, should they win December’s general election.
UK residents will be unaffected, with the Tories saying that their plans will help first-time buyers and curb rising prices.
Chief Treasury secretary Rishi Sunak said of the policy: "Evidence shows that by adding significant amounts of demand to limited housing supply, purchases by non-residents inflate house prices.”
Sunak added that the UK as a country would "always be open to people coming to live, work, and build a life in this great country”.
He said: “The steps we are taking will ensure that more people have the opportunity of a great place to live and build a family.”
Meanwhile, the Labour Party has also suggested applying a levy to “overseas companies buying housing” and giving local people the priority for purchasing homes built in their area.
Under current regulations, foreign nationals and businesses from abroad are able to purchase properties just as easily as UK residents, with some of these being bought as investments and remaining empty for long periods of time, an issue which has become particularly prevalent in London.
The Conservatives cited a study which indicates that 13 per cent of homes in the capital were bought by non-residents between 2014 and 2016.
Furthermore, a 2018 study from the King’s College Business School indicated that overseas buyers forced prices up at the higher end of the market, which culminated in a “trickle down” effect to cheaper properties, both within the capital and elsewhere.
The Tories had planned to impose a one per cent levy on stamp duty for non-UK tax residents back in February this year, but this has now gone up after Mayor of London, Sadiq Khan, argued that a one per cent surcharge was insufficient.
The Conservatives estimate that the new surcharge would impact around 70,000 purchases annually, raising an extra 120 million, which the party says will go toward reducing the rate of homelessness.
Prime minister Boris Johnson has already announced his party’s plans to address the housing crisis by helping first-time buyers with new mortgage rates and discounts for local properties, alongside an increase in house building in the private sector to deliver a million new homes between now and 2024.