By Emqanuele Midolo.
At Black Brick, we work with international buyers on a daily basis, so when political parties propose changes to the taxes foreign investors pay on UK property, it is something we watch very closely — and have clear, informed views on.
Ahead of the general election, Labour signalled its intention to increase the stamp duty surcharge paid by overseas buyers, with a rise of one to two percentage points being widely discussed. Our Managing Partner Camilla Dell, speaking to The Times, offered a nuanced and carefully considered response to these proposals.
On the question of whether Labour would ultimately follow through, Camilla expressed scepticism. But if an increase were to be introduced, her view is that a rise of one percentage point would likely be tolerated by the prime market. Buyers at this level are sophisticated and well-resourced, and while some might seek to negotiate a corresponding reduction in the asking price, the additional cost would not in itself be a dealbreaker for most. There could be some softening of prices and a modest slowing of activity, but nothing catastrophic.
What would be genuinely damaging, Camilla argues, is the introduction of draconian measures along the lines of those seen in other countries. Canada’s outright ban on foreign property purchases is the clearest example of the kind of intervention that would, in her words, simply kill the market. London’s appeal to international buyers — its culture, connectivity, world-class schools and relative affordability compared to other global cities — is a fundamental strength of the UK economy. Policy measures that aggressively undermine that appeal would have consequences far beyond the prime property market itself.
London’s property tax regime, even with a modest surcharge increase, would remain considerably more competitive than comparable international cities such as Singapore and Hong Kong, where foreign buyer stamp duties have reached 60 per cent and 30 per cent respectively. That context matters enormously when assessing the likely impact of any changes proposed by either party.
At Black Brick, we are committed to keeping our international clients fully informed of the evolving regulatory landscape and ensuring they can make confident, well-advised decisions whatever the political environment delivers.
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