The government has launched a new consultation on the stamp duty land tax (SDLT) surcharge for non-UK residents.
The consultation proposes an additional 1% on top of the existing SDLT rates when non-residents purchase residential property in the UK. The aim of the proposed policy is to improve the affordability of the housing market.
The consultation proposes a simplified residence test, with the surcharge only applying if they have spent less than 183 days in the UK in the 12 month period prior from acquiring the property. However, those moving to the UK will be entitled to a refund in the event that the 183 day limit is met in the subsequent 12 months. The top rate of SDLT will be at 16% for those within the scope.
Our view is that the introduction of the new rule will just add more complexity to the numerous amount of SDLT rules currently in force for all buyers of property in the UK and is unlikely to change the current purchasing behaviour of non-residents and therefore will not make a material impact on house price inflation and increase in affordable homes. What the proposal does achieve is to continue to the negative message to potential overseas investors into the UK.
Responses to the consultation are sought by 6 May.
For further information please feel free to contact James Cohen on email@example.com or 0207 822 2222.