This week Rishi Sunak, the new Chancellor of the Exchequer, held his first budget where he announced as of April 2021 there will be a 2 per cent property stamp duty surcharge on properties purchased by non-UK residents.
The 2 per cent surcharge is proposed to raise funding to help tackle the problem of rough sleeping across the country.
The move, coupled with the announcement this morning from the Bank of England of an interest rate cut, was generally welcomed by the property industry at large.
Andy Foote, director at SevenCapital, commented: ‘The introduction of a reduced 2 per cent surcharge will of course be a welcome move should it be effective in raising the Government’s target £650 million funding to help rough sleepers across the UK. It will also prompt a level of relief for non-UK resident property investors against what was initially speculated to be a 3 per cent surcharge that might have been implemented within the next few months.
‘Where these investors are concerned, whether they be overseas nationals or British expats wishing to keep their wealth within the UK, this move is likely to be met with relief and extended opportunity. The allowance of a further 13 months until the levy is implemented will be welcomes by those wanting to get into the market ahead of time, as will the slightly reduced levy amount for those who were expecting the higher figure.’
Chris Sykes, mortgage consultant at Private Finance, agreed, saying: ‘It’s no surprise in the circumstances surrounding today’s Budget that much-needed reform to stamp duty land tax has been parked for now, other than the 2 per cent surcharge for non-UK residents. It’s welcome to see confirmation that the extra funds this will deliver from April next year will go towards tackling rough sleeping across the country.
‘The April 2016 stamp duty surcharge for landlords and second home buyers prompted a stampede of purchasers seeking to beat the deadline to grasp lower rates before they disappeared. International interest in UK property has been on the rise since December’s election, and the looming surcharge may add to the incentive for overseas investors to pursue purchases sooner rather than later.
‘Meanwhile, on the domestic front, any mortgage borrowers on tracker products linked to the Bank of England base rate will take heart from this morning’s rate cut in these uncertain times.’