Guardian: May to impose levy on foreign house buyers

[ebull]

6 hours ago, fru-gal said:

The Tories think people are stupid. Oh well, the longer they put off real change the more renters are going to be forced to vote for the extreme option (Labour). 

That would be the same Labour who locked in CGT advantage for all gains before the year changed for anyone non-resident at time of sale.

So yeah, owned for 30 years, resident for 25, sell 3 year after CGT cvharged to foreign residents means you pay tax on 3/30 = 10% of the gain. You get a lower rate for the first 30k of the taxable amount provided you'r a COMMONWEALTH citizen.

Labour did that [I think Brown/Darling]. Tories have chosen not to change it.

The commonwealth bit relates to entitlement to personal allowance. That would be a much larger gain for the total tax take I guess .... remove the personal allowance for all non-residents. Would hit expat BTLers too.

[maffo in oxford]

5 minutes ago, ebull said:

AFAIRC [not sure], ATED [annual levy] applies to UK companies and now applies to anything over 500k [threshold quietly decreased some years after introduction without any publicity].

 

 

Is the £500k threshold per Individual property, or the potential total value of a whole portfolio?

[ebull]

Just now, maffo in oxford said:

Is the £500k threshold per Individual property, or the potential total value of a whole portfolio?

Per property I think. It's a crazy banded system.

Looks like tax year 2018-19 they change the valuation date which is effectively a further huge drop in the thresholds / increase in houses that are taxed.

gov.uk provides pretty clear info on most of this stuff which is why it's crazy journos get it completely wrong.

https://www.gov.uk/guidance/annual-tax-on-enveloped-dwellings-the-basics

"ATED is an annual tax payable mainly by companies that own UK residential property valued at more than £500,000.

You’ll need to complete an ATED return if your property:

• is a dwelling
• is in the UK
• was valued at more than:
  • £2 million (for returns from 2013 to 2014 onwards)
  • £1 million (for returns from 2015 to 2016 onwards)
  • £500,000 (for returns from 2016 to 2017 onwards)
• is owned completely or partly by a:
  • company
  • partnership where any of the partners is a company
  • ­collective investment scheme - for example a unit trust or an open ended investment vehicle

"

Edited September 30, 2018 by ebull

[Captain Kirk]

50 minutes ago, ebull said:

That would be the same Labour who locked in CGT advantage for all gains before the year changed for anyone non-resident at time of sale.

Definitely not the same Labour (not that I'm advocating voting for them).

[Will!]

1 hour ago, ebull said:

AFAIRC [not sure], ATED [annual levy] applies to UK companies and now applies to anything over 500k [threshold quietly decreased some years after introduction without any publicity].

If that's true , the avoidance would only work for cheaper houses.

If it's not true, it should/could be.

 

57 minutes ago, ebull said:

Per property I think. It's a crazy banded system.

Looks like tax year 2018-19 they change the valuation date which is effectively a further huge drop in the thresholds / increase in houses that are taxed.

Interesting, thanks.  It looks like the Annual Tax on Enveloped Dwellings is ripe for reform: change the banding system to a percentage, tax the aggregate value of all dwellings etc.

[spyguy]

4 hours ago, ccc said:

Plenty of places across the globe where foreigners can't buy residential property full stop. If we are going to allow it tax it hugely imo. 10%+.

Just what exact benefit to this country  does it actually bring ? 

There are places on the planet where it can be a benefit - but I really can't see how the UK is one. 

The majority of countries require you to be paying tax to buy property.

Most will not let a non resudent own property.

Simrple solution for Chinese buyers is to alliw one chinese buyer in the uk for each uk buyer in china.

[Odin]

10 minutes ago, spyguy said:

Simrple solution for Chinese buyers is to alliw one chinese buyer in the uk for each uk buyer in china.

And yet they will still get a great deal.

Have you seen the quality of those places over there ?

Just levy a tax for every year of ownership is held by a non-UK, this should include entities where it is established the controlling interest / shareholders / beneficiaries can not be proven to be 50+% UK citizens.

Edited September 30, 2018 by Odin

[MARTINX9]

A 3% levy - pathetic. Its 18 per cent in Singapore. After all its a cheap price for money laundering and access to the UK legal system and property rights.

Why not follow many countries - Australia, NZ, China and others - that ban non UK and Irish (given historic reciprocal rights) citizens and long term permanent residents from buying land/houses at all. A country that works for British citizens not just the privileged 1%?!

Edited September 30, 2018 by MARTINX9

[Horseradish]

11 hours ago, spyguy said:

No, there is a valid case for this.

There are lots of dodgy foriegners stashing cash via property in the UK. Needs stoping, failing stopping it needs taxing.

There's no reason to accomodate/help non tax paying property owners.

 

Yes ,it's a problem. But the point is that this policy is a lowbrow electorate-pleasing non-solution.

[Bear Goggles]

2 hours ago, ebull said:

Per property I think. It's a crazy banded system.

Looks like tax year 2018-19 they change the valuation date which is effectively a further huge drop in the thresholds / increase in houses that are taxed.

gov.uk provides pretty clear info on most of this stuff which is why it's crazy journos get it completely wrong.

https://www.gov.uk/guidance/annual-tax-on-enveloped-dwellings-the-basics

"ATED is an annual tax payable mainly by companies that own UK residential property valued at more than £500,000.

You’ll need to complete an ATED return if your property:

• is a dwelling
• is in the UK
• was valued at more than:
  • £2 million (for returns from 2013 to 2014 onwards)
  • £1 million (for returns from 2015 to 2016 onwards)
  • £500,000 (for returns from 2016 to 2017 onwards)
• is owned completely or partly by a:
  • company
  • partnership where any of the partners is a company
  • ­collective investment scheme - for example a unit trust or an open ended investment vehicle

"

Interesting. Does this apply to UK property owned by off-shore companies? I assume not as it’s collected via a U.K. Tax return.  

It’s easy to see how a small tweak to this could kill off small time BTLers’ option of buying properties via a limited company to avoid the tecent tax changes though. 

[Lenelby]

6 hours ago, ccc said:

Plenty of places across the globe where foreigners can't buy residential property full stop. If we are going to allow it tax it hugely imo. 10%+.

Just what exact benefit to this country  does it actually bring ? 

There are places on the planet where it can be a benefit - but I really can't see how the UK is one. 

The benefit is that it helps our balance of payments. 

[spyguy]

1 hour ago, Horseradish said:

Yes ,it's a problem. But the point is that this policy is a lowbrow electorate-pleasing non-solution.

Are there any high brow electoral pitches?

[durhamborn]

18 minutes ago, Lenelby said:

The benefit is that it helps our balance of payments. 

Exactly.We buy a million in Chinese goods.The Chinese then park that million in a London house.We get the goods for free,they get to experience a house price crash and their capital up in smoke at some point.We need some way to pay for all the trampolines in half the countries back gardens paid for with tax credits.

[Horseradish]

1 minute ago, spyguy said:

Are there any high brow electoral pitches?

Point. But she's not got much else in the way of new policy going on this at the moment. Interest rates are out of the government's hands though, so I guess we just have to wait for it to sort itself out.

[Horseradish]

1 minute ago, durhamborn said:

Exactly.We buy a million in Chinese goods.The Chinese then park that million in a London house.We get the goods for free,they get to experience a house price crash and their capital up in smoke at some point.We need some way to pay for all the trampolines in half the countries back gardens paid for with tax credits.

See also: https://uk.reuters.com/article/uk-markets-capital-flows-deutsche-idUKKBN0M61FM20150310

[msi]

Pathetic.  So a British leech is better than a foreign one? 

Edited September 30, 2018 by msi
spelling for leech

[mathschoc]

7 hours ago, oatbake said:

I can no longer vote tory if they continue to fiddle around the edges of the housing crisis. Time is running out for me, and I feel as though I've completely slipped through the net. I have worked hard, am a single parent (although son is now almost an adult). Never been out of work/on benefits. I have a good job. I see loads of empty homes around me; they're almost exclusively BTLs between tenants. Private rents are extortionate and have been for years. But that's hardly surprising when it is cheaper to buy IO with interest rates so ridiculously low. 

I am completely and totally disillusioned. I even delivered leaflets for my local tory MP in 2010 as I was so desperate for change. For the record, I cannot bring myself to vote for Corbyn and his hard-left crohnies either.

I thought Theresa was going to take personal responsibility for solving the housing crisis. All we've seen is more of the same.

Really fuxxed off with everything right now. 

I feel where you are coming from. I am a single parent too, decent job and not been able to put a permanent roof over the kids heads yet. Pay packet has been squeezed for a decade. I will take any party over this current spineless, consultation obsessed lazy sh***.

 

[BorrowToLeech]

10 hours ago, Lenelby said:

The benefit is that it helps our balance of payments. 

In the way that burning your clothes can help you keep warm. 

[monkeyman1974]

14 minutes ago, BorrowToLeech said:

In the way that burning your clothes can help you keep warm. 

I prefer to pi55 down my trouser leg

[PropertyMania]

I;m no fan of the Tories or May - as stated, she's an awful NIMBY -  but seriously, why all the gloom? Yes, 3% is small, but it sets a precedent and will be ratcheted up budget after budget. Expect more like 10% in five years' time. Cheer up.

PS house builder shares down a bunch this morning  - also good news. 

 

Edited October 1, 2018 by PropertyMania

[UnconventionalWisdom]

4 minutes ago, PropertyMania said:

I;m no fan of the Tories or May - as stated, she's an awful NIMBY -  but seriously, why all the gloom? Yes, 3% is small, but it sets a precedent and will be ratcheted up budget after budget. Expect more like 10% in five years' time. Cheer up.

PS house builder shares down a bunch this morning  - also good news. 

 

You are right that it's better than nothing but it seems to be more about getting the headlines of addressing an issue without actually addressing the issue. 

It's like the lettings fee ban. Stated that it was unfair on tenants and they would shift it to the landlord. We sit here, 1.5-2 years later and it's still the tenant paying the lettings fee. 

[PropertyMania]

Just now, UnconventionalWisdom said:

You are right that it's better than nothing but it seems to be more about getting the headlines of addressing an issue without actually addressing the issue. 

It's like the lettings fee ban. Stated that it was unfair on tenants and they would shift it to the landlord. We sit here, 1.5-2 years later and it's still the tenant paying the lettings fee. 

That's true, and does seem odd that they announce these tax changes in advance of implementation. Same was done with second home buyer stamp duty levy that caused a rush of transactions. 

[lastlaugh]

10 minutes ago, PropertyMania said:

I;m no fan of the Tories or May - as stated, she's an awful NIMBY -  but seriously, why all the gloom? Yes, 3% is small, but it sets a precedent and will be ratcheted up budget after budget. Expect more like 10% in five years' time. Cheer up.

PS house builder shares down a bunch this morning  - also good news. 

 

Yeah, I’m cautiously optimistic too.  The direction of travel is clear.  The scale and negative impact of foreign investment in UK property is now common knowledge.  But for many years it was widely assumed, even by politicians, that it was a ‘fortunate’ side effect of globalisation.  

The truth is it’s been an active policy if UK PLC for 2 decades, with tax breaks, golden visas, etc.  The wheel is turning as voters realise the foreigners destroying the country are not the fruit pickers but the speculating spivs.

[No One]

On 30/09/2018 at 03:22, rantnrave said:

https://www.theguardian.com/politics/2018/sep/29/theresa-may-slaps-new-property-tax-on-foreign-buyers

She has* or she says she will*. big difference between the two

[the_dork]

The Tories are stuck. This is a small tokenistic policy responding to the zeitgeist but they'll never compete with the Corbynistas on changing the status quo so they have to target the voters broadly happy with existing system. Probably favour some small real terms reduction over 10 years with minor tax changes to encourage owner occupation, keep lending going with crazy new debt/loan innovations

 Whereas Labour are offering much more progressive tax, mass social housing, tenant friendly laws in private sector...these wouldn't particularly be my solutions but they have appeal to those with little stake in the current system. The Tories are stuck and they know it, interesting times!

Edited October 1, 2018 by the_dork