Extra 2% Stamp Duty for overseas buyers criticised by agents

NAEA Propertymark says additional duty is leading to plethora of sales fall-throughs as purchasers realised additional cost of buying property.


Agents have pinned a dramatic drop in the number of overseas property buyers particularly in London on the Government’s new Stamp Duty rules.

From 1st April, homes bought in England and Northern Ireland by non-UK residents are being struck with an additional 2% stamp duty charge on top of the rate that applies to purchases made by UK residents. The additional taxation was introduced in the Chancellor’s most recent budget.

Overseas buyers are now being treated as non-UK residents if they were not in the UK for at least 183 days during the 12 months before their purchase. Travel bans have pushed many foreign buyers into this category and agents report that many are unaware of the charge until they have progressed through a transaction.

naea liane laporto browne stamp dutyNAEA Propertymark president Liana Loporto-Browne (pictured) says: “Since travel restrictions have eased, numbers are still extremely low for those wishing to buy a property within London from overseas. Trends bought to light by NAEA Propertymark regional executives show that the increase in stamp duty for non-UK residents is already having a knock-on effect and buyers are pulling out of sales due to the additional fee.”

Jonathan Hopper (pictured), NAEA Propertymark executive for buying agents, says chains are falling through due to buyers and property professionals being unaware of the qualifying details of the additional charge. He says: “The property sector has a collective responsibility to help educate buyers on this issue so they can obtain independent tax advice. This assists all parties and reduces the risk of transactions collapsing due to lack of awareness of key information, which may impact some purchasing decisions.”

The government has said that buyers may be able to claim a tax refund if, after the purchase, they are present in the UK for at least 183 days in the two-year period starting a year before the purchase and ending a year after the purchase.

What's your opinion?

Back to top button