George Osborne – Chancellor of the Exchequer recently clamped down on wealthy investors who don’t intend to reside or rent any expensive properties they buy.
In the recent budget Mr. Osborne advised that anyone buying a property exceeding £500,000 or more via a company structure will now be forced to pay a 15% stamp duty charge.
He also indicated that they would reduce the tax threshold which was introduced and set in 2012 (for properties purchased through a company envelope which is set up specifically for this purpose and just served to avoid stamp duty) from £2m to homes worth £500,000.
That will mean that practically every property in London bought for investment purposes by the international rich through companies will fall into the 15% tax bracket.
The treasury announced they would reduce the threshold for annual tax on properties purchased via a company to £500,000, however this will be a staggered change, starting in April 2015, with an introduction of a £7,000 per annum charge on homes worth between £1m & £2m
Overseas investors have played a considerable role in fuelling London property prices, this has been a hot topic in previous months & the Government aim to discourage the use of ‘ corporate envelopes ‘ to invest in high value UK housing which is then left unoccupied or rarely used.
Homes that are rented out will be exempt from this change in a bid to reduce the number of empty properties in London.