London luxury homes face foreign buyer tax

By BLOOMBERG

LONDON • Britain’s highend and luxury homebuilders face a squeeze as Prime Minister Theresa May prepares to impose higher taxes on foreigners looking to buy properties in the UK.

Overseas buyers account for roughly half of all residential transactions in central London, according to Faisal Durrani, head of research at property consultants Cluttons LLP.

Berkeley Group Holdings plc, the homebuilder with the most exposure to the UK capital, fell the most among its peers in London trading yesterday.

“Further taxes on international buyers send out a conflicting message about post-Brexit Britain being ‘open’ to the world,” Durrani said.

“We will have to revisit our residential forecasts with a view to making further downward revisions, should the international residential surcharge be confirmed.”

Unveiling its policy plans as the Conservative Party conference began on Sunday, the government said it will begin consultations to increase the stamp duty on individuals and companies not paying tax in the UK.

Ministers are considering a rate ranging from 1% to 3%, according to the Sunday Telegraph newspaper.

“This policy, with its uncomfortable echoes of blaming foreigners for every ill, may make good headlines, but it sends an uncomfortable message to the rest of the world and will do nothing to create more homes for those unable to buy or to rent today,” said Henry Pryor, a UK-based luxury real estate broker.