The government has confirmed it will levy a stamp duty surcharge for non-UK residents buying property within the UK.
In his debut Budget speech today (March 11), new chancellor Rishi Sunak announced a 2 per cent surcharge on the existing tax levy — currently between 2 per cent and 10 per cent depending on the property value — for non-UK investors in UK property.
It was originally thought the surcharge would be a 3 per cent additional levy for overseas buyers, but Mr Sunak's Budget speech confirmed a 2 per cent hike.
The new rules will come into effect from April 1, 2021. Supporting documents published today said: "This will help to control house price inflation and to support UK residents to get onto and move up the housing ladder."
Mr Sunak said this additional income to the Treasury would go towards helping rough sleepers find permanent accommodation, create 6,000 new places for people to live and trigger a step change in the support services for homeless people.
Tom Bill, head of London residential research at Knight Frank, said the move would bring the UK in line with "many other global property markets", adding any attempts to ease affordability pressures should be welcomed.
He added: "Furthermore, a wider re-think of stamp duty rates is still needed to increase housing market liquidity and maximise any stimulus the government plans to provide to the UK economy.”
But Guy Harrington, chief executive of property lender Glenhawk, said the policy was "misguided".
Mr Harrington said although the levy would be a valuable source of income for the Treasury from all over the world, the chancellor's focus should be on measures that would stimulate the housing market and support current and potential homeowners across the pricing spectrum.
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