A new stamp duty land tax (SDLT) surcharge for non-UK resident homebuyers will be introduced to help control the rise of house prices.
In a surprise announcement, the Government revealed that it will consider how a one per cent increase to stamp duty costs for non-UK residents buying residential property in England and Northern Ireland would work.
It added that the proceeds of the new surcharge would be put towards measures to tackle rough sleeping.
The Stamp Duty Land Tax: non-UK resident surcharge consultation, found here, states that the tax will apply to freehold and leasehold purchases of residential property and will be at a rate of one per cent on top of all existing SDLT rates, including the rates applicable to the rental element of leasehold property.
The document also considers the definition of ‘non-residents’ and how the charge will apply to companies.
“The charge will apply to any person who is non-resident in the UK, including certain UK-resident companies which are controlled by overseas shareholders,” it reads.
“However, crown employees working abroad – such as military service personnel – will not have to pay the surcharge at all whilst those who buy residential property and then move to the UK will be eligible for a refund of their extra payment.”
Commenting on the announcement Mel Stride, Financial Secretary to the Treasury, said the evidence shows that “non-UK resident buyers of UK property could be inflating housing prices”.
“A one per cent surcharge could help more people own their own homes in the future, and its proceeds will go towards tackling rough sleeping, boosting our plan to halve the numbers of rough sleepers by 2022,” she said.
The consultation period for the new surcharge closes at 11.59pm on 06 May 2019.
Further updates from Macalvins will be provided in due course.