On the 1st of October 2018, at the Conservative Conference, the Prime Minister Theresa May has announced that overseas buyers and companies (not registered in the UK) will be required to pay between 1% and 3% extra stamp duty when purchasing a property in the UK. This will raise an estimated £120 million in revenue each year.
According to research by Knight Frank, “the measure will affect London most heavily. Within the capital a third of homes are sold to foreigners and almost half in prime central London according to Hamptons, while those looking for homes near London’s top private schools alone have snapped up 2,162 properties worth £2 billion over the past 12 months’’.
The announcement is expected to cause wide spread upset amongst agencies who specialize in selling UK property to overseas buyers. The reason given for this decision is to allow UK based buyers a higher chance of securing a home; May stated that buyers who do not pay taxes and live in the UK have a massive impact on property prices in the UK.
Details of how much additional stamp duty will be payable have not yet been revealed. These measures are part of a move to tighten the regulations for overseas buyers. At the start of the year, it was made clear that the national register of foreign companies which own or buy property in the country was to be kept. However, three years ago the law was changed to prevent non-domiciled residents in the UK avoiding UK taxes, including inheritance tax, by holding them via offshore companies.