UK increases stamp duty for foreign property buyers

The stamp duty surcharge will begin to be collected from April 2021. This decision may lead to a temporary surge in the activity of foreign investors in the country’s market, writes Mansion Global.

The Chancellor of the exchequer of the United Kingdom, Rishi Sunak, announced that from April 2021, an additional stamp duty of 2% will be introduced for foreign buyers of real estate.

Despite the fact that the amount of the fee was less than expected, the new tax may be an unfortunate step for the local real estate market, which has just begun to recover.

However, this news may provoke a temporary surge in activity on the part of investors who will rush to purchase real estate before April 2021.

For those foreigners who already own one property in the UK, the new 2% tax will add to the additional fee for the purchase of a second home, the rate of which is 3 %.

In this case, when buying the most expensive property worth more than 1.5 million pounds, the amount of fees will reach 17 %, taking into account that the stamp duty will also be added at 12 %.

“The timing of the tax increase for foreign buyers in the UK is extremely unfortunate. With the UK facing its biggest financial threat in a decade amid fears that the coronavirus epidemic could trigger a global recession, the government should take steps to attract foreign investment,” said Hannah Aykroyd, managing Director of Aykroyd & Co.