The Chancellor, Philip Hammond will launch consultation on increased stamp duty for non-resident buyers of homes in England and Northern Ireland.
The move follows a speech by the Prime Minister, Theresa May, at this year’s Conservative party conference, in which she stated her intention to impose a levy of between 1% and 3% on foreign buyers. Revenue raised would be targeted at homelessness and used on a package of measures aimed at ending rough sleeping by 2027.
Following the Budget announcement, the consultation on a 1% stamp duty surcharge will begin in January. It would be in addition to the existing three per cent stamp duty surcharge on second homes and buy-to-let properties, which was introduced in April 2016.
Around 13% of new-build properties in London are bought by people from outside the UK. Some commentators support increased stamp duty in order to reduce competition among buyers and lower prices, especially in the most expensive neighbourhoods.
However, many in the industry believe this type of intervention would be detrimental, discouraging investment in new projects and creating uncertainty in the market. The move is also seen as sending a negative signal to international investors – when the UK should be demonstrating itself open to overseas business in a post-Brexit world.
The consultation was one of a series of announcements about housing in the Chancellor’s Autumn Budget on 29th October. In his Budget speech Mr Hammond acknowledged that tackling the housing shortage is crucial to the economy, before outlining a package of measures. They included a pledge of £500m for the Housing Infrastructure Fund to help deliver 650,000 new homes. There was also an injection of £675m to improve the struggling British high street, including plans to turn empty shops into residential properties.
Read more about the Budget and its implications for the London property sector in the Evening Standard Homes & Property