29th October 2018
The Budget - stamp duty surcharge for foreign buyers.
Those of us who think that the stamp duty system is already broken were dismayed by the government's announcement that it is to 'consult' on the ideal of levying an additional 3 per cent stamp duty on any foreign person buying property in the UK.
This was Theresa May's headline grabber at the Tory party conference. Fast-forward to the Budget, and while Philip Hammond said nothing about this, the small print confirmed that the proposal has been reduced to a 1 per cent surcharge with a consultation published in January.
If this is brought in, it it will be on top of the 3 per cent surcharge already payable by those who own, or have a beneficial interest in, another property elsewhere in the world, which any foreign buyer looking in the UK is likely to have. So, if this foreigner is looking to pay more than £2m, the headline rate of stamp duty will be 16 per cent.
On the one hand, the government claims to champion social mobility and diversity but on the other, it is saying that if you are foreign you are not welcome. There is no logic to it. If this government thinks that penalising overseas buyers will revitalise the economy and get things going, then it is very wrong.
It is hard enough trying to sell a property in this market and any community, which has had the fortunate experience of a foreign or UK-based buyer purchasing a large house in their area, will have benefited from the spin-off prosperity this brings countless people. Whether it be tradesmen at all levels, tech providers, gardeners, or other professionals who all earn wages, salaries and fees from said buyers - it helps create activity in other areas of the market. It truly is a top-down fuelling of the property market at a whole.
It’s time to stop tinkering with the property market. The government should put its arm around the industry and realise it’s one of the cornerstones that makes the UK a place where many people want to live, wherever they originally come from.