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Budget 2020: Two per cent stamp duty surcharge for overseas buyers

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  • 11/03/2020
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Budget 2020: Two per cent stamp duty surcharge for overseas buyers
Overseas buyers of property will face a two per cent stamp duty surcharge from April 2021, chancellor Rishi Sunak (pictured) has announced.

 

The surcharge will also be charged on top of any other stamp duty levies, including the three per cent second home surcharge that is already in place.

It is thought the measure could affect as many as 70,000 purchases and HM Treasury expects to raise up £140m over the next five years to 2024/25.

It means a non-resident buying a second home worth more than £1.5m could end up with a stamp duty bill amounting to 17 per cent of the purchase price.

The levy was originally proposed during Theresa May’s leadership at Budget 2018 where it was a one per cent figure, however it was never introduced.

It was resurrected as part of the Conservatives’ General Election manifesto in December with a further report that it would be introducing the measure published last week.

 

Landlord support

In January, a survey of 750 landlords commissioned by FJP Investment found around 70 per cent of property investors in the UK are in favour of the surcharge for non-UK buyers while 60 per cent supported the banning of the sale of new homes as leaseholds.

Following the original proposals in 2018, HM Treasury said it hoped the surcharge would not deter anybody coming to live and work in the UK.

The plans then called for anyone who spent more than 183 days of the year after the property purchase in the UK will be eligible for a refund.

At the time, HM Treasury added that it wanted to keep the residency test as simple as possible as it was aware most people buying homes would not be using a professional tax adviser.

It is not yet clear if the same limitations will apply to the newly-announced version.

 

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