In his Budget speech on 11 March, the Chancellor announced the introduction of a 2 per cent stamp duty land tax surcharge for non-UK residents which is due to come into effect from 1 April 2021.
This will mean that non-resident individuals and companies buying UK residential property will pay a rate which is 2% higher than that which a UK individual or company would pay.
The Treasury announced that this measure will be introduced “in order to help to control house price inflation and to support UK residents to get onto and move up the housing ladder”.
It is estimated that tax surcharge will generate £105m tax revenue, which will then be used to tackle rough sleeping.
For individual overseas buyers, who are thinking of purchasing an additional residential property in the UK, either as a second home or an investment, this 2% rate will be charged in addition to the existing 3% stamp duty land tax surcharge when purchasing a second home or an investment property.
The government will consult on draft legislation over the summer and introduce the change in the 2020/21 Finance Bill.
Pauline Hudd Tax Partner at Wilder Coe says “in this time of global uncertainty, and the challenges of travel restrictions facing us all, it is unclear what impact this will have on the UK residential market in the longer term”
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