Overseas property buyers and investors who use companies to make their U.K. property purchases were targeted in yesterday’s Budget statement. Finance Minister George Osborne announced changes to Stamp Duty on properties that are purchased through companies, and thereby closing a tax loophole. Previously the 15 percent tax was payable on properties valued at £2 million or more; now it has been reduced to £500,000. This increase is in addition to the Capital Gains Tax revisions for non-resident owners of U.K. property that were announced in December. From April 2015, foreign owners of U.K. property will have to pay a Capital Gains Tax. Justifying the new move, which came into effect at midnight today, Osborne said: “Many of these are empty properties held in corporate envelopes to avoid stamp duty.” Commenting on the new tax, Gary Hersham of Beauchamp Estates said: “This move is not as aggressive as some had expected it to be, and has been positioned as a clamp-down on all, rather than an attack on foreign buyers and high net worth individuals. “However, combined with the December 2013 announcement on Capital Gains Tax, this is a further stealth move which attacks those who invest in property. Such a move can only serve to deter rather than attract investment, and dampens the number of transactions which are the very life blood of the sector.” Hersham added that such moves will serve to decrease the number of times a property changes ownership, decreasing income to those operating in the sector.
Posted on: Thu, 20 Mar 2014 08:22:25 +0000
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