New Stamp Duty surcharge announced
A new consultation has been launched by HM Treasury together with HMRC seeking views on the design of a new 1% Stamp Duty Land Tax (SDLT) surcharge on non-UK residents purchasing residential property in England and Northern Ireland. This move was first mooted in the Budget 2018. The consultation closes for comments on 6 May 2019.
The consultation document makes it clear that the new SDLT surcharge would apply to freehold and leasehold purchases of residential property and will be at a rate of 1% on top of existing SDLT rates, including the rates applicable to the rental element of leasehold property. The government has said that there is evidence that purchases of property by non-UK residents is pushing up house prices for UK residents. The measure is intended to help control house price inflation. It is hoped that this move will assist more UK residents with an opportunity to buy their first home.
Mel Stride, Financial Secretary to the Treasury and Paymaster General said:
‘The UK is and will remain an open and dynamic economy, but some evidence shows that non-UK resident buyers of UK property could be inflating house prices.A 1% surcharge could help more people own their own homes in the future, and its proceeds will go towards tackling rough sleeping, boosting our plan to halve the numbers of rough sleepers by 2022.’
The government will also introduce reliefs from the new charge for crown employees working abroad and there will be a mechanism for non-residents who have paid the surcharge and move to the UK to claim a refund of the extra SDLT.