“Yesterday, the Conservatives chose to release part of their manifesto early. If elected, they would introduce a 3% surcharge on the purchase of dwellings by non-residents.
“Theresa May had announced the surcharge (then 1%) at last year’s annual conference. The estimated £120m of additional revenue would be used to tackle homelessness. There are problems with it, though.”
He added, “The evidence that non-residents push up house prices is based on old data; it does not address supply; it could impact on the delivery of new homes (as house builders frequently rely on off plan sales to non-residents to forward fund developments); and it will bring more complexity to a regime that conveyancers already struggle with.”
Sean said, “The big question, however, is: is this a prelude to large stamp duty cuts for UK residents, as proposed by the Prime Minister earlier this year? At 18%, it is surely only a matter of time before the rate of stamp duty on residential purchases overtakes VAT. That seems incredible, bearing in mind that less than ten years ago the rate was 5%!”
For more information, please contact Sean Randall.