THE Government is to launch a consultation this month on whether it should impose an additional Stamp Duty Land Tax (SDLT) charge on non-UK resident homebuyers.
Under the initial proposals, UK homebuyers based overseas will be charged an additional 1% of SDLT which would already be payable on their property purchase.
Whether you are buying a modern waterside apartment in Leeds, a student flat in Bradford, a new-build family home in Harrogate, or a rural retreat in the Yorkshire Dales, purchasers from overseas will be hit hard in the pocket.
The move is part of an effort to make homes in the UK more affordable to UK residents who have seen house prices increase at rates far in excess of household incomes.
Research demonstrates that the foreign investment market is partly responsible for the sharp rise in house prices since recovery from the credit crunch began around 2010.
Since then, the price of the average house price in Yorkshire and the Humber has soared by £33,900, or 23.14%, while average real wages in 2018 were roughly comparable to January 2010 levels.
The statistics show that action is required, with the affordability of housing at an historic low, and the Government is now taking small steps to redress the balance.
For foreign investors into the UK residential property market, moving quickly and decisively to make new acquisitions prior to the end of the consultation on May 6, eliminating the threat of this additional charge seems a prudent step.
For UK resident homebuyers and prospective homebuyers, particularly in developing locations where investment property returns are maximised – such as parts of Leeds including Horsforth, Pudsey and Meanwood – the prospect of less competition for properties is likely to be a welcome relief.
Should the proposal make it through the consultation phase and into law, the conveyancing jury is still out on whether the levy would be enough to dissuade foreign investment.
There are added fears among conveyancing experts that it may be difficult to ascertain, and could be lost in a wide variety of additional variables.
Any money raised through the 1% additional SDLT will be put towards the Government goal of ending rough sleeping by 2027.
Whether you are a concerned foreign investor, excited first-time buyer or anything in between, Milners’ property specialists are here to help with all of your residential conveyancing needs.
You can read more about the Government’s plans by clicking here: https://www.gov.uk/government/news/new-stamp-duty-land-tax-surcharge-for-non-uk-resident-homebuyers-to-be-introduced
Should you have any questions or concerns regarding residential property and conveyancing in general, or the SDLT consultation in particular, please do not hesitate to contact this article’s author, paralegal Nathan Watts, a member of our residential property and conveyancing team here at Milners on 0113 245 0852, 01423 530103 or email us at hello@milnerslaw.