Govt launches 2% stamp duty surcharge for non-UK residents
During today’s Budget, Chancellor Rishi Sunak confirmed that the Government will introduce a stamp duty surcharge of 2% for non-UK residents from 2021.
The surcharge will apply to non-UK residents purchasing residential property in England and Northern Ireland from 1 April 2021.
The Government says the measure will help to control house price inflation and to support UK residents to get onto and move up the housing ladder. The money raised from the surcharge will be used to help address rough sleeping.
Rachael Griffin, tax and financial planning expert at Quilter, said: “As promised during the Tory campaign, a stamp duty surcharge for non-UK resident buyers has been brought in during the 2020 budget. However, Sunak has not quite gone as far at the Tory manifesto pledge and has opted for a 2% rather than 3% charge.
“This represents a crowd-pleasing policy which will win over people worried that foreign house buyers are hoovering up UK property as an investment, only to leave it empty, which further exacerbates the housing crisis gripping the nation.
“While this surcharge introduction is welcomed, increasing the UK’s housing stock will have a more important impact for domestic buyers. Planning reforms, set to be announced tomorrow, may reveal additional new measures which aim to stimulate the construction of more housing.”
Milton Rodosthenous, director of online auction service LetsBid Property, commented: “The stamp duty surcharge for non-UK tax residents represents positive news for domestic property buyers and landlords. Competition from overseas buyers – which has been rife in recent years, particularly in the UK’s largest cities – is likely to reduce significantly.
“However, the additional tax could pose problems for the Prime Central London market, in which there is currently a huge amount of overseas investment. The market has been struggling for several years since George Osborne’s stamp duty reforms in 2014 and this latest move could see a further reduction in prices and activity.
“Actively discouraging overseas investment with a 2% surcharge could be troublesome. Perhaps a 1% surcharge on overseas buyers – as originally mooted by politicians – would be fairer and more effective in creating a level playing field for all property purchasers?”
Source: Financial Reporter