Capital Gains Tax change could bring "flood" of sales
The introduction of a so-called new 'Oligarch Tax' could prompt a huge rise in the number of new properties entering the sales market, theguardian.com reports.
In his Autumn Statement, George Osborne announced that the UK would finally step into line with many other countries and force non-residents who sell UK property to pay capital gains tax (CGT) on their profits.
Osborne did announce, though, that this change would not take place until at least April 2015, in order to give property investors time to assess their own situations. As such, insiders now believe this could bring about a "flood" of sales, as overseas investors look to sell up ahead of their 2015 deadline and escape the CGT net.
Whilst many analysts were bracing themselves for a sales rush, some were not quite so convinced. Among them was head of Knight Frank Global Research, Liam Bailey, who claimed that tax may not play as big a role in property portfolios as some people are giving it credit.
He said that tax was certainly not one of the primary drivers for international buyers opting for property in the UK. In addition, all these changes do is bring Britain in line with other major world economies. Seeing as these manage fine with foreign investors, Bailey couldn't see there being too much of an exodus.
He told introducertoday.co.uk: "It is important to note that the change to CGT rules brings the UK in line with other key investor markets, such as New York and Paris, where equivalent taxes can approach 35 to 50 per cent, depending on the owner's residency status."