Concerns have been raised by the ATT that a proposed increase in stamp duty for non-UK residents buying residential property in the UK will have an impact beyond its intended target of foreign investors.
The ATT’s concerns are set out in a response to a recent HMRC consultation. The consultation proposes that non-UK residents purchasing residential property in England or Northern Ireland will be charged an additional one per cent Stamp Duty Land Tax (SDLT). A final date for the introduction of the extra charge is yet to be confirmed. The objective of the measure, according to the consultation document, is to help control house price inflation and assist UK residents to get on the housing ladder.
Michael Steed, Co-Chair of ATT’s Technical Steering Group, said: “We are concerned that the proposal will have an impact beyond non-UK resident investors, and is not in line with the policy aim of helping UK residents to get on the housing ladder.
Under the proposal, the additional rate will apply to joint purchases of property if either of the purchasers are non-UK resident. This means that the measure will affect couples who wish to purchase a house together in the UK, with one of them intending to live in it immediately but the other currently living or working abroad. In addition, a couple who currently own a home in the UK, but where one party already works abroad, will be affected if they move house and the non-resident spouse remains working overseas. While they could avoid the issue by buying only in the name of the UK resident spouse, this may not be practical for mortgage purposes nor be what the couple wish.
Individuals looking to return to the UK who acquire property more than six months in advance of their return will also be unable to obtain a refund of the extra SDLT that they had been required to pay.”