Overseas buyers likely to pay extra tax to buy UK property in next Government
24 November 2019
Overseas buyers likely to pay extra tax to buy UK property in next Government

With the 2019 Christmas election well underway, both the Conservatives and Labour party have put forward proposals to increase tax on overseas buyers including companies buying UK property should either party win the election and hold a majority in the next government.

Labour has pledged to put an extra tax on non-UK companies and trusts buying property in the UK and would charge offshore firms 20% for property purchases, on top of existing stamp duties and surcharges.

The Conservatives later followed, when referring to a recent study noting more than 13 per cent of new London homes were bought by non-UK residents in 2014 to 2016,  stating they would introduce a 3 per cent stamp-duty surcharge for non-tax resident companies and individuals who buy property in the UK, which they claim will raise an estimated £120m a year.

The new Conservative policy will mean an additional 3% on top of the already higher rate stamp duty imposed in April 2016

 

Standard Rate

Higher Rate

Proposed Overseas Rate

Below £125,000

0%

3%

6%

£125,001 and £250,000

2%

5%

8%

£250,001 and £925,000

5%

8%

11%

£925,001 - £1,500,000

10%

13%

16%

Over £1.5 million

12%

15%

18%

 

In the new proposal, it would potentially mean that on a £300,000 property, a non-UK tax resident company or individual would be paying around 4 times more tax compared to the standard rate at around £23,000 in stamp duty tax

Meanwhile, Labour have stated that it would double council tax rates for British holiday home owners, which the party hopes will raise £560 million a year.

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