Yesterday, the Conservative Party launched its 2019 General election manifesto, setting out the policies it will pursue if it is re-elected next month. Tucked away in the section on housing delivery is the promise, announced last week, to introduce “a stamp duty surcharge on non-UK resident buyers”.
The plan is to levy an additional 3% stamp duty on non-UK property buyers, including companies as well as individuals – and also expats wanting to come back to the UK.
The Conservatives, using figures from a 2017 University of York research report, say one in eight new London homes were bought by non-residents between 2014-16. A Kings College London study is also quoted, which alleges that a 1% increase in homes bought by overseas investors has reduced housing supply, leading to a 2.1% increase in prices.
The Tories’ argument is that this level of overseas investment “adds significant amounts of demand to limited supply, inflating house prices and making it harder for people in Britain looking to get a foot on the property ladder”.
According to Property Investor Today, if the higher tax was implemented, a wealthy overseas buyer of a London home worth 1.5 million would pay 183,750 in stamp duty compared with 93,750 for a Londoner buying the same property. The measure could raise up to 120 million a year and the money would be used to tackle rough sleeping.
Other cities around the world, including Hong Kong, Singapore and Vancouver successfully levy similar surcharges and we are wholeheartedly in favour of bringing in this measure here too.
Ringley CEO Mary-Anne Bowring believes stamp duty is a way to either curb foreign demand for UK property (if that is indeed possible) or at least to earn more tax from it. Any tax is a barrier to a free market but it is important that a free market is not at the expense of hard-working UK residents. The fact is, she says, is that it has been far too easy for foreign investors to take advantage of our Brexit woes and the recent fall in the value of sterling.
The UK is still regarded as a safe haven for investors and we have become a cheap place to buy due to exchange rates (proven in the Kings College statistics quoted). So it is unfair that the UK should become increasingly more expensive for our own residents to buy, eat and live!
“In fact, there are other countries that treat it as a privilege for foreigners to be able to invest in their domestic markets and I believe that the UK should charge a premium for the privilege,” says Mary-Anne.
We welcome this proposal. What do you think? Let us know in the comments section below.