November 22, 2019
A Conservative majority government will introduce a higher rate of stamp duty for those buying property who are not UK tax residents.
At present, foreign individuals and companies who are not tax resident in the UK are able to buy homes as easily as those who live here.
They are often bought by wealthy individuals or companies and kept as investments or rented out at inflated prices: a recent study showed that 13 per cent of new London homes were bought by non-residents in 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.
In order to help tackle this, we will introduce a Stamp Duty Land Tax surcharge levied at 3% to apply to companies as well as individuals.
The measure will raise up to £120 million a year, and this money will be directed at programmes to help tackle rough sleeping.
The Conservatives are turning around Labour’s broken housing policies that saw the lowest peacetime house building rates since the 1920s. New housing supply under the Conservatives has already reached the highest level in almost 30 years and we are helping more people on the housing ladder through Help to Buy and scrapping stamp duty for most first-time buyers.
Chief Secretary to the Treasury, Rishi Sunak, said:
“The Conservative Party is levelling up opportunities across the country, helping millions of people into home ownership. Evidence shows that by adding significant amounts of demand to limited housing supply, purchases by non-residents inflate house prices. That is why we are introducing a higher rate of stamp duty for non-UK residents that will help to address this issue and could raise up to £120 million.
“Britain will always be open to people coming to live, work, and build a life in this great country. The steps we are taking will ensure that more people have the opportunity of a great place to live and build a family.
“Housebuilding is already at its highest level for 30 years, with over 240,000 homes delivered last year. A vote for the Conservatives will allow us to get on with implementing our ambitious domestic agenda, instead of a Labour government spending 2020 distracted by another two chaotic referendums rather than focusing on people’s priorities.”
It will be charged on top of the 3 per cent additional rate payable for second home or investment property purchased and be charged at up to 3 per cent. It will apply to companies as well as individuals, and to ex-pats.
We estimate this may affect 70,000 purchases per year. It is our intention to provide an exemption to Armed Forces and Crown Services personnel serving overseas for work. This policy applies to England only.
The surcharge will be levied on top of all other stamp duty payable, including the higher levels of stamp duty introduced in April 2016, on second home and buy-to-let purchases. This starts at a combined three per cent for homes valued below £125,000, with five per cent on the next portion between £125,001 and £250,000, eight per cent on the portion between £250,001 and £925,000, 13 per cent on the portion between £925,001 and £1.5 million and 15 per cent above that.
More than 1.4 million people have used Help to Buy ISAs and more than 221,405 properties have been bought using the Help to Buy Equity Loan scheme. There were more first-time buyers in August 2019 than in any month since 2007 (HMT, News Story, 26 February 2019, link; MHCLG, Help to Buy (Equity Loan Scheme), 25 July 2019, link; Hansard, 15 July 2019, link; MHCLG, Help to Buy (Equity Loan Scheme), 25 July 2019, link).
Over 340,000 families have benefited from our First-Time Buyers’ Relief since it was introduced in 2017, saving over £804 million (HMRC, Quarterly Stamp Duty Land Tax Statistics, 31 July 2019, link).
The total is more than at any time since the report began in 1991, and beats the previous record of 223,530 recorded before the financial crash in 2007-08 (MHCLG, Housing Supply: Net Additional Dwellings, 14 November 2019, link; The Guardian, 14 November 2019, link).
The cross-Government Strategy, developed with charities and experts, will provide timely support to those at risk of rough sleeping, intervening to help people already on the streets get the support they need, and helping people recover and rebuild their lives. We are already seeing rough sleeping falling for the first time this decade (MHCLG, News Story, 13 August 2018, link; MHCLG, Rough Sleeping Statistics Autumn 2018, England (Revised), 25 February 2019, link).
Commenting, Therese Coffey, Secretary of State for the Department of Work and Pensions, said:
“Corbyn’s Pension Tax will see ten million savers facing a huge bill forcing them to delay their retirement for almost three and a half years.
“This is just one of the ways a Corbyn government would hammer hardworking people on top of his plans to hike up taxes by £2,400 a year, as well as the cost of his plan for unlimited immigration and the chaos of 2020 being dominated by two more referendums – one on Brexit and another on Scottish independence.
“Only Boris Johnson and the Conservative Party can get Brexit done with a deal, get parliament working again and turbocharge our economy to unleash Britain’s potential.”