LONDON: Foreign buyers of English properties will have to pay a levy of 3% of the purchase value under plans put forward by Prime Minister Boris Johnson’s Conservatives, aimed at deterring wealthy investors from driving up house prices.
The plans form part of the Conservative Party’s campaign to win a Dec. 12 election, which is heavily based around Johnson’s promise to deliver Brexit within months and move on to domestic issues like education, healthcare and policing.
Successive British governments, including the last nine years of Conservative rule, have failed to alleviate a long-term housing shortage which has driven up property values and priced many working Britons out of buying their own home.
The proposed reforms to Stamp Duty Land Tax – a levy on property purchases – would apply to companies and individuals who are not resident in Britain for tax purposes, and could raise up to 120 million pounds per year, the party said.
London’s high property prices and a strong legal system have made it the destination of choice for foreign billionaires looking for a safe place to park their cash, attracting Russian and Middle-Eastern money especially.
A Conservative briefing note cited an academic study which showed 13% of new London homes were bought by non-residents from 2014 to 2016.
“This adds significant amounts of demand to limited supply, inflating house prices and making it harder for people in Britain looking to get a foot on the property ladder,” the briefing note said.