The British Property Federation has welcomed amendments to the 2013 Finance Bill that will ensure foreign buyers of luxury residential property pay their fair share of tax, while safeguarding genuine business investment in residential property.
The Chancellor used March’s Budget to announce he intended to close an alleged £1bn stamp duty loophole, where some super-rich foreigners avoided paying the levy by putting expensive homes in offshore companies.
The BPF raised concerns at the time that the announced measures could be applied indiscriminately across the UK market, with potentially disastrous consequences for commercial investment in residential property.
The changes also ensure capital gains tax and an annual charge catch foreign buyers of luxury residential property, while not impinging on genuine business investment in UK residential property.
Liz Peace, chief executive of the British Property Federation, said: “Foreign buyers of luxury residential property for their own enjoyment were always the intended target of the stamp duty changes; it was never designed to deliberately clobber commercial investment in UK housing.
“The devil will be in the detail, but it appears Ministers have listened and sensibly decided to make technical changes that ensure the scope of the measure is not wider than it needs to be.
“It is, however, unfortunate the confusion has led to an investment hiatus due to the uncertainty. Because of the legislative procedure businesses looking to invest today will have to wait until next summer, or pay the additional 8 per cent.”