The UK government’s plan to raise sales taxes on second homes in Britain will also cover buyers living abroad, reported Bloomberg.
In November, UK Chancellor of the Exchequer, George Osborne, said buyers of second homes as well as buy-to-let properties within the UK will have to pay stamp-duty sales tax that is three percentage points higher from April compared to those who are purchasing a home to live in.
A consultation document revealed that the government will consider assets located outside the UK when determining whether a person is acquiring an additional home.
“This means that if someone is purchasing their first or only property in England, Wales or Northern Ireland, they may pay the higher rates if they own property outside these areas,” stated the document.
Demand from foreign buyers has contributed to an increase in London home prices, while off-plan sales abroad have helped property developers fund projects such as the Battersea Power Station. Data from the Office for National Statistics shows that home prices within the city climbed 7.7 percent in the year through October.
Meanwhile, the stamp-duty sales tax will increase from 12 to 15 percent for acquisitions of £1.5 million (S$3 million) or more. Tax rates for properties with a lower value will be raised from between zero and 10 percent to between three and 13 percent.
–PROPERTYGURU
