Overseas buyers of UK property would face a stamp duty surcharge of 3% under proposals unveiled by the Conservative party ahead of its manifesto launch.
Currently, non-resident homebuyers are paying the same rates of stamp duty land tax as those who are living in the UK. However, the government has been consulting on adding 1 percentage point on the duty for the overseas buyers; this week, the Conservatives said that they would bring in a 3% surcharge for these buyers if elected with a majority.
Based on this increase, the party estimated that this would affect up to 70,000 transactions a year and raise £120m in revenues – this money would be set aside to tackle the problem of rough sleeping. It referred to academic research suggesting that overseas buying activity drives up house prices and pushes out first-time buyers and other domestic purchasers.
If it comes to pass, the plan will leave some foreign buyers at the top end of the market paying as much as 18% in stamp duty.
Experts said the policy would be met with dismay by property developers, since their big city centre schemes were often made possible by future purchase pledges by overseas buyers and the deposits they provide.