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Tighter Rules For Mega-Rich Foreigners Could Dent London Property Prices

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http://moneyweek.com/merryns-blog/tighter-rules-for-rich-foreigners-could-dent-london-property-prices/

TL:DR - Foreigners can no longer invest in property in the UK in order to get a Tier 1 visa. They also have to invest £2 million in the country, now excluding property. The Tier 1 Visa is the start of the process to acquiring permanent residency and then citizenship.

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This is actually a big deal. The numbers are not small and even if it was just 5,000 people a year you'd be talking about a sizeable chunk of the newly built properties. I know two people whose job is helping foreigners obtain tier 1 for a 5% fee (min of £50k) and all they do is a bit of admin and find them a new build to buy in London (a lot of the clients never even see the flat). The clients know London property is pretty much govt backed and don't think twice about buying it. Making them invest in a productive asset (company) based in the UK is turning them away in droves.

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It's kind of weird that a Tory-ish government is pushing through all these tax/status changes which are effectively a deterant against foreigners/non-doms buying UK property. Unless they got pressured into doing all this stuff (talking about ATED/ATED related CGT/CGT from April 2015/SDLT for enveloped properties and now this) by the Lib Dems, perhaps they are seeing how destructive selling off property has been to the economy?

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