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Stamp Duty On Foreign Buyers

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As I drove back from Kew Gardens today the GF and I decided to take a drive through Holland Park, Notting Hill, Maida Vale, St John's Wood in London back to our home in Tufnell Park. It's been a glorious sunny day and lots of people out and about doing their thing and I just noticed BMWs and Mercedes Benz after Mercedes Benz in these areas sprinkled with a few Porsches, Ferraris etc.

Knowing what a magnet these areas are for foreign buyers I thought "why don't they bring in an eye watering stamp duty for foreign buyers?" I mean, it's already 15% in Hong Kong and Singapore so why not here? Do these people really benefit the UK so much they deserve to pay the same stamp duty as us UK Proles?

I'm thinking why not even go further and put a 30% stamp duty on all foreign buyers and close all known loop holes to prevent the usual buying through a company etc. I don't think this would deter the super rich buyers one iota and it would provide a useful means to raise some funds for the poor old Treasury. Basically the UK would be saying, okay, you want to buy property here then you bl00dy well pay through the nose for it. Looking outside of the London bubble, would a 30% stamp duty really deter some "canny" chap from Hong Kong buying up new build BTL flats in the centre of Manchester?

As much as I detest Labour I think this is exactly the sort of policy they should be championing, because quite frankly the Tories have proved themselves to be so completely useless in everything they've done since 2010. The way I see it, such a measure would cool the London market and these foreign buyers would have to put their money somewhere else - hell, they might actually "invest" it in something productive here in the UK!

Someone please tell me I'm not completely mad!?

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One of the problems is that if a house if already owned by an offshore company, there's no way to track the sale. In theory if an estate agent was involved then you could compel them to report the transactions. I do think it would be helpful to adopt a long term strategy to discourage property from being registered offshore.

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As I drove back from Kew Gardens today the GF and I decided to take a drive through Holland Park, Notting Hill, Maida Vale, St John's Wood in London back to our home in Tufnell Park. It's been a glorious sunny day and lots of people out and about doing their thing and I just noticed BMWs and Mercedes Benz after Mercedes Benz in these areas sprinkled with a few Porsches, Ferraris etc.

Knowing what a magnet these areas are for foreign buyers I thought "why don't they bring in an eye watering stamp duty for foreign buyers?" I mean, it's already 15% in Hong Kong and Singapore so why not here? Do these people really benefit the UK so much they deserve to pay the same stamp duty as us UK Proles?

I'm thinking why not even go further and put a 30% stamp duty on all foreign buyers and close all known loop holes to prevent the usual buying through a company etc. I don't think this would deter the super rich buyers one iota and it would provide a useful means to raise some funds for the poor old Treasury. Basically the UK would be saying, okay, you want to buy property here then you bl00dy well pay through the nose for it. Looking outside of the London bubble, would a 30% stamp duty really deter some "canny" chap from Hong Kong buying up new build BTL flats in the centre of Manchester?

As much as I detest Labour I think this is exactly the sort of policy they should be championing, because quite frankly the Tories have proved themselves to be so completely useless in everything they've done since 2010. The way I see it, such a measure would cool the London market and these foreign buyers would have to put their money somewhere else - hell, they might actually "invest" it in something productive here in the UK!

Someone please tell me I'm not completely mad!?

What evidence do you have to suggest that the government is in any way interested in "cooling" the London property market ?

The government knows falling house prices = unpopularity. So they will continue to try to maintain them by throwing small amounts of money in with gravity defying schemes and sucking in hot money from outside.

They will continue to do this until/unless some sort of momentous event occurs that is to big for them to deal with. At that point market forces will re-establish themselves.

IMO the next chance of an unforced price reduction will not be until after the next election.

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What evidence do you have to suggest that the government is in any way interested in "cooling" the London property market ?

The government knows falling house prices = unpopularity. So they will continue to try to maintain them by throwing small amounts of money in with gravity defying schemes and sucking in hot money from outside.

They will continue to do this until/unless some sort of momentous event occurs that is to big for them to deal with. At that point market forces will re-establish themselves.

IMO the next chance of an unforced price reduction will not be until after the next election.

I'm not saying that on the surface the Gov want to cool the market, but deep down they know the whole situation is out of control and something will need to be done in London.

It's rapidly becoming more and more populated by the super rich and the poor who have been fortunate enough to come by a council house or are managing to claim the maximum housing benefit to pay the rent to some parasite BTL owner whilst earning £££ on the side.

Its middle income people like muggins here who are being taken for a ride.

BTW I totally agree that it won't be until Balls and Milliband are in Number 10 & 11 before something changes; whether it's rent controls or some sort super foreign owner stamp duty, or maybe super tax on 2nd home owners.

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I'm not saying that on the surface the Gov want to cool the market, but deep down they know the whole situation is out of control and something will need to be done in London.

It's rapidly becoming more and more populated by the super rich and the poor who have been fortunate enough to come by a council house or are managing to claim the maximum housing benefit to pay the rent to some parasite BTL owner whilst earning £££ on the side.

Its middle income people like muggins here who are being taken for a ride.

BTW I totally agree that it won't be until Balls and Milliband are in Number 10 & 11 before something changes; whether it's rent controls or some sort super foreign owner stamp duty, or maybe super tax on 2nd home owners.

I think they probably do know that the situation is getting worse. All they care about though is whether they win the next election. otherwise they won't have the luxury of dealing with the consequences.

My guess is that they can bubble the market up and keep it going until after the next election. They'll worry about when the bubble bursts after that.

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The OP is making way too much sense. I wonder how big a mansion tax would have to be though to deter a Russian or Chinese nouveau riche?

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How else are the pounds we sent over to china going to re-patriate themselves to the UK?

Going to build factories and buy our products? HA!

Nope. They'll buy assets and rent them back to us. And then, as they know our entire political class and all major parties are full of traitors lobby to make sure what they have brought remains scarce. No new homes, no new roads etc. And their lobbying will work.

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One of the problems is that if a house if already owned by an offshore company, there's no way to track the sale. In theory if an estate agent was involved then you could compel them to report the transactions. I do think it would be helpful to adopt a long term strategy to discourage property from being registered offshore.

Correct. Imagine a company (UK registered) with one owner (UK citizen). No foreign owners.

but...in a draw in a lawyers office in Switzerland is an agreement transferring ownership to the foreign owners. That document will never see the light of day unless there is a legal dispute between the UK 'owner' and the true owner. The Uk 'owner' can even rent it out to the foreigners and claim business deductions, ching ching.

The ONLY way is a law that says wherever the above situation is identified 100% of the property becomes the property of the UK gvt PLUS any whistleblower gets 25% of the price. Otherwise secrecy will always win.

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Someone please tell me I'm not completely mad!?

I'll pass.

http://www.guardian.co.uk/business/2013/mar/27/britain-current-account-deficit-worst-since-1989

That has to be paid for somehow, and the only way is to sell something to the foreigners that they want. The country would be properly shafted without petrol, gas, food, and Chinese tat. Oh, and houseprices would go up in Sterling after they become cheaper still for people paying with less debased fiat.

Are you really so bothered about two-million pound houses in London being a million overpriced? Do you say to yourself "if only they cost just a million, I'd buy two"?

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Nope. They'll buy assets and rent them back to us.

In Thailand it is illegal for non Thai nationals to own land which effectively prevents foreigners from buying a house, although there are some odd rules which allow foreigners to buy a condo providing only 49% of the block is foreign owned. There are also some odd schemes where a buyer sets up a company with non contributing Thai directors and the company, and hence the foreign owner owns the land but these schemes are illegal and the government will simply confiscate the property if they find out.

I am married to a Thai and our house was bought in her name; I had to sign a legal document stating I had no claim to the property and the property was not part of the marital assets. i.e if we get divorced I get nothing (happens in the UK anyway as I found out 12 years ago). There is a grey area if she dies and leaves the house to me in a will which I have looked into but it is too long winded for this post.

The result of this is that property in Thailand tends to be priced around what local people can afford, our 3 bed detached house cost £38K 4 years ago which means we have no debt and can spend our salaries on holidays, private school for our daughter and my pension.

I believe the purpose of this policy is to prevent wealthy foreigners simply buying up properties and renting them out to locals at extortionate rates... err ...as they do in London.

I have heard there is a similar situation in the Philippians.

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I'll pass.

http://www.guardian.co.uk/business/2013/mar/27/britain-current-account-deficit-worst-since-1989

That has to be paid for somehow, and the only way is to sell something to the foreigners that they want. The country would be properly shafted without petrol, gas, food, and Chinese tat. Oh, and houseprices would go up in Sterling after they become cheaper still for people paying with less debased fiat.

Are you really so bothered about two-million pound houses in London being a million overpriced? Do you say to yourself "if only they cost just a million, I'd buy two"?

Do you really believe that selling houses to foreigners in any way helps UK PLC? I mean, maybe you can argue that maybe they come here and buy cars etc. and employ maids, eat out in restaurants etc. but I would think that cooling prices would be far better for us all, and those that want to buy can pay a punitive rate of stamp duty if they so wish.

It would mean lower rents for many people, and cheaper housing for those that wish to but meaning more disposable income which will be spent within the UK.

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Stamp duty is entirely the wrong form of tax. It just encourages a range of dodges to avoid it, and distorts the market.

On the other hand, an annual land value tax would offer property owners an ideal opportunity to contribute to the conditions that make it attractive for them to own that property.

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Do you really believe that selling houses to foreigners in any way helps UK PLC?

I believe that their money is somewhere between useful and essential. The country is currently not able to earn enough foreign currency to pay for its imports, so must sell something. Exchanging a few bits of land in London for a tanker of fuel seems like a very sensible trade under the circumstances.

I mean, maybe you can argue that maybe they come here and buy cars etc. and employ maids, eat out in restaurants etc. but I would think that cooling prices would be far better for us all, and those that want to buy can pay a punitive rate of stamp duty if they so wish.

Cooling prices will be very expensive for those of us who pay tax. Not that it's a reason for the government to double down on that bet.

It would mean lower rents for many people, and cheaper housing for those that wish to but meaning more disposable income which will be spent within the UK.

You cannot spend UK income abroad unless you are paid in foreign currency. You first have to sell it to someone who wants to spend it here. And "unspent" money is what keeps the banks afloat (because it in fact was spent some time ago).

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I believe that their money is somewhere between useful and essential. The country is currently not able to earn enough foreign currency to pay for its imports, so must sell something. Exchanging a few bits of land in London for a tanker of fuel seems like a very sensible trade under the circumstances.

Cooling prices will be very expensive for those of us who pay tax. Not that it's a reason for the government to double down on that bet.

You cannot spend UK income abroad unless you are paid in foreign currency. You first have to sell it to someone who wants to spend it here. And "unspent" money is what keeps the banks afloat (because it in fact was spent some time ago).

Wrong. Foreign landlords pay money now in return for a perpetual GBP income stream. From the perspective of the uk economy as a whole, this is a loan, with no expiry and a GDP linked interest rate.

Whatever the short term effects, the long term effects are to weaken the economy and therefore the currency.

Britain is still about the fifth or sixth biggest economy in the world, demand for the pound comes from demand for our significant export trade.

We need foreign land owners about as much as we need bird flu.

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Are you really so bothered about two-million pound houses in London being a million overpriced? Do you say to yourself "if only they cost just a million, I'd buy two"?

They're not just buying superprime. They're BTLing in big volumes in london too, so they're in direct competition with Joe Soap and pushing prices up big time.

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They're not just buying superprime. They're BTLing in big volumes in london too, so they're in direct competition with Joe Soap and pushing prices up big time.

Have been speaking to lying scum an estate agent as I was thinking about putting my place on the market, and this is basically what they have said.

I'm in N19 so it's hardly prime London, but he basically said good two bed Victorian conversion flats like mine are seen as a one way bet by foreign speculators.

Buy property and rent out to young professional proles who cannot get a deposit together renting in London and cannot get a mortgage.

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Wrong. Foreign landlords pay money now in return for a perpetual GBP income stream. From the perspective of the uk economy as a whole, this is a loan, with no expiry and a GDP linked interest rate.

But payable in Sterling, as you note. There is quite a lot of that in BoE's computer.

Suppose someone wanted to spend a relatively large amount of foreign currency (say several families worth of lifetime income) on a bit of land in Harare just as the food was running out. Would the correct answer have been "you are pricing people out, go away", "this is really a loan, go away", "we'll just stop importing stuff when foreign currency runs out, go away", or "here you go, now let's import some food"? Clearly, the UK is still way ahead of that curve, but already at the money-printing stage.

Whatever the short term effects, the long term effects are to weaken the economy and therefore the currency.

Your alternative being? The whole approach now is just to delay very bad things, except maybe if growth somehow returns. But that has been the plan for the last five years, and it's not going so well. Or maybe I missed something?

Britain is still about the fifth or sixth biggest economy in the world, demand for the pound comes from demand for our significant export trade.

Why not just buy some foreign houses to compensate then?

The ranking is just a number that does not matter so much to the individual. The bottom line is that the country is currently living significantly beyond its means, and that will have to stop. Somehow, it doesn't seem like the people are quite ready yet.

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Have been speaking to lying scum an estate agent as I was thinking about putting my place on the market, and this is basically what they have said.

I'm in N19 so it's hardly prime London, but he basically said good two bed Victorian conversion flats like mine are seen as a one way bet by foreign speculators.

In essence - it's a bubble. They think it's a one way bet now, but they won't think that way forever and at that point there will be no visible means of support for the market.

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But payable in Sterling, as you note. There is quite a lot of that in BoE's computer.

Suppose someone wanted to spend a relatively large amount of foreign currency (say several families worth of lifetime income) on a bit of land in Harare just as the food was running out. Would the correct answer have been "you are pricing people out, go away", "this is really a loan, go away", "we'll just stop importing stuff when foreign currency runs out, go away", or "here you go, now let's import some food"? Clearly, the UK is still way ahead of that curve, but already at the money-printing stage.

Your alternative being? The whole approach now is just to delay very bad things, except maybe if growth somehow returns. But that has been the plan for the last five years, and it's not going so well. Or maybe I missed something?

Why not just buy some foreign houses to compensate then?

The ranking is just a number that does not matter so much to the individual. The bottom line is that the country is currently living significantly beyond its means, and that will have to stop. Somehow, it doesn't seem like the people are quite ready yet.

1. Rent Payable in sterling means the landlord will be selling sterling to buy his local currency. The effect on the currency iis likely to be net negative, but it will mess with the yield curve so might have the effect you suggest in the short term.

2. Bad example. Britain is not starving. Selling your own land in order to raise foreign currency is like burning your clothes to keep warm. As a last resort, perhaps, but long term it'll only make things worse.

3. The ranking of economies is almost meaningless, i agree,however it does tell you one thing - we are not broke yet. As a nation, we dont need to start selling off our final remaining assets - the country itself.

4. I suggest fixing the ******ing economy. Radical I know.

Two things alone would be enough: Tax land to cut income tax, and build housing, but there are plenty of other things that could be done to actually turn things around.

Economically, I don't think it would even be difficult. The problem is entrely political - lazy, greedy old buggers who want to be the richest people in hell.

Edited by (Blizzard)

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And this is the problem if we have a property crash, surely the mega rich would buy up as much as they could get their greedy hands on knowing full well they can't go wrong even if they left it empty for decades?

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And this is the problem if we have a property crash, surely the mega rich would buy up as much as they could get their greedy hands on knowing full well they can't go wrong even if they left it empty for decades?

Unless there is a Land Value Tax or at least anything which is not your primary home is subject to business rates.

If you have a home outside the UK or you are not ordinarily resident in the UK, then the UK one can't be primary residence.

Land value Tax preferred by me.

That would kill off the speculators.

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  • 244 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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