Sean Randall, a partner at Blick Rothenberg, the leading tax and advisory firm, said: ‘Non-resident buyers will breathe a sigh of relief that the stamp duty surcharge will not be introduced this year and will be 1% lower than expected.’
However, it will be introduced and appears to be driven by political imperative rather than economic theory. For example, non-residents are a major market for off-plan sales which fund new schemes (such as Battersea Power Station in London), which include affordable housing.
Hitting that market and making it less appealing to international investors could reduce supply, increase demand and drive-up house prices in some parts of the country – the very opposite of the intended effect.
Although admittedly this is likely to be counter-balanced to some extent by the decision to invest an additional £9.5 billion in the affordable homes programme to support the creation of affordable homes across England.
There is no doubt that it will also make stamp duty even more complicated. Many residential conveyancers understandably struggle with stamp duty and a thriving tax reclaim industry is proof of this.
Other countries have similar schemes and ours looks cheap in comparison. The non-resident surcharge in other countries is much higher, for example Vancouver’s is 20%, but non-residents may feel they can get more for their spend elsewhere.
This will be seen by many as yet another grab on the prime central London property market and those affected will be entitled to ask themselves when it will end.’
Mark Levitt, a partner at Blick Rothenberg said: ‘Non-residents looking to acquire a residential property should do so before 6 April 2021 when stamp duty increases by 2%.’
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