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17.12.2015 03:49 Age: 2 days

Foreign buyers must pay surcharge on 'additional' UK property purchases


The UK government has confirmed that its new 3 per cent surcharge on the purchase of additional properties will apply to foreign buyers and non-doms as well as UK residents.
The charge was announced by Chancellor George Osborne in last month's Autumn Statement. Starting next April, it raises the top rate of stamp duty land tax (SDLT) to 15 per cent on affected properties.

The phrase 'additional properties' explicitly includes second homes as well as residential lets. However, there is still some uncertainty about its scope - for example whether it will apply to overseas properties, or to overseas buyers. The draft Finance Bill clauses to implement the measure will not be available until January, but the matter of overseas buyers has now been officially settled in a parliamentary answer from Treasury Minister David Gauke. 'Foreign investors and people not domiciled in the UK will be treated in exactly the same way as UK residents under these new rates', he told MPs. 'If purchasers own another property anywhere else in the world and are purchasing an additional property in England, Wales or Northern Ireland they will be charged under the new rates.'

The same surcharge is also be added to Scotland's land and buildings transaction tax.

  • Research by Countrywide Residential Lettings has estimated the impact of the 3 per cent surcharge at 11 months' income for the average mortgaged landlord.

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Foreign buyers must pay surcharge on 'additional' UK property purchases