Osborne set to impose CGT on foreign property buyers
Chancellor to combat London house price bubble with new tax reform
GEORGE OSBORNE is considering imposing capital gains tax (CGT) on overseas investors buying UK properties, according to Sky News. This comes as fresh figures show house prices are rising at their fastest rate for more than three years.
In a move to stop house prices accelerating out of reach of homebuyers, the chancellor is said to be "actively investigating" charging CGT when foreign buyers sell their UK homes. This would bring their taxation in line with UK citizens.
While British homeowners are expected to pay CGT of between 18 and 28 per cent if a profit is made on the sale of their house, foreign investors are currently exempt from this payment.
Foreign investors are commonly blamed for soaring house prices in London – a rise of 10 per cent occurred in August alone. In prime areas such as Kensington and Chelsea, the average house is worth almost 30 times the average local salary.
A government spokesperson has characterised the reports of reform as "speculation" but said "we need a range of approaches on housing which very much recognise in large parts of the country the value of homes has barely increased".
However, if the plans go ahead, there are fears that this might "undermine the government's message of keeping Britain 'open for business'", according to Sky News sources within Whitehall.
Neither the Treasury nor HMRC will comment on the rumoured reform, which is thought to be introduced in December's autumn statement. ·