In an attempt to make property more affordable for British residents, the Government plans to increase the stamp duty surcharge for foreign buyers.
Theresa May announced the plans to selected journalists ahead of the Conservative Party Conference this week in a deliberate ‘leak’.
The proposals will see foreign buyers being subject to between an additional one per cent and three per cent tax. That’s on top of existing higher levels of stamp duty, introduced in 2016, on second home and buy-to-let purchases.
“Britain will always be open to people who want to live, work and build a life here” Theresa May Says.
“However, it cannot be right that it is as easy for individuals who don’t live in the UK and don’t pay taxes here, as well as foreign-based companies, to buy homes as hard-working British residents.
“For too many people the dream of home ownership has become all too distant and the indignity of rough sleeping remains all too real.”
The Tories claim that research from York University shows 13 per cent of new London homes were bought by non-residents between 2014 and 2016.
Currently, overseas residents can buy homes in the UK as easily as those who live here but economists say it is adding £4,800 to the price of an average-priced home costing £227,000.
The move to address foreign buyers snapping up UK property is seen as an attempt by the Prime Minister to address the criticism aimed at her for failing to follow through on her pledge to take “personal charge” of solving a housing crisis.
A one per cent stamp duty surcharge, on any individual or company not paying tax in the UK, is expected to raise £40m a year – rising to £120m, if a three per cent levy is introduced later.
Mrs May will announce she is consulting on the changes at the Tory conference which opens in Birmingham today.