Accountants have given their backing to the government’s plans to impose additional stamp duty on foreign buyers of UK properties, saying the ‘super-rich’ are exacerbating the UK’s housing shortage
Prime minister Theresa May has unveiled a stamp duty levy of between 1% and 3% on such property transactions this week at the Conservative Party conference in Birmingham.
Phil Hall, head of public affairs and public policy at The Association of Accounting Technicians (AAT), welcomed the move, calling it ‘sensible and measured’.
'This isn’t going to solve the housing supply problem but it’s a sensible and measured response to an increasing problem that will also raise £40-£120m and add a degree of previously absent fairness to the system,’ he said.
Hall said action was needed to address the additional pressure overseas buyers were putting on the UK’s housing supply.
‘Put simply, it doesn’t matter how many houses are built in the UK, there will never be enough to meet demand because demand is not simply coming from the 65m currently resident in the UK but from across, Europe, Asia and America,’ he said.
‘Years of London property purchases by the super-rich from Russia, China, America and various other countries are well documented but it’s not just London that overseas investors are setting their sights on. Liverpool, Manchester and other parts of the UK are proving equally attractive.
‘What’s more, it is no longer the super-rich alone who are snapping up properties across the country. Middle income earners from across the world, especially China, Malaysia and Singapore, are finding UK property an increasingly attractive proposition – even more so since the weakness of sterling following Brexit.’
The AAT also point out that other EU nations already impose restrictions on overseas property investors (Poland, Denmark, Hungary) and that Iceland, Australia, New Zealand and Singapore prevent, restrict or tax overseas property investment, demonstrating that such measures can be successful.
Meanwhile, others voiced concerned about how the proposal would be practically implemented and called for ‘careful consideration’.
Andrew Hubbard, tax consultant at RSM, said: ‘…there is a world of difference between a headline-grabbing policy announcement and a set of rules which will define the scope of the tax and the way that it is to be administered. Let us hope that there is full consultation on what is proposed and that there is no rush to implement, as changes of this sort need careful consideration’.
Report by Rob Munro