Interest in UK property from overseas buyers is surging as investors look to take advantage of the current stamp duty holiday which ends on March 31 2021. Headlines over the past few months have broadcasted the fall in the value of the pound, which has been great news for overseas buyers looking to snap up a deal.
At the same time, overseas investors are also looking to pick up UK properties before an additional 2% stamp duty surcharge for non-UK buyers is introduced next April, many foreign buyers and British expats are looking to act now to swerve this tax and buy before April 2021.
At the moment, non-UK residents and UK resident buyers pay the same Stamp duty rates on purchases of UK property. However, Chancellor Rishi Sunak announced in the Budget on 11 March 2020, that SDLT for overseas buyers will include a Stamp Duty surcharge of 2% for purchases from 1 April 2021.
The non-UK resident SDLT surcharge will apply at a rate of 2% above the residential rates, and this can be in addition to the existing 3% higher rates surcharge for owning one or more residential properties overseas. So, SDLT for overseas buyers will be at a rate of 17% of the purchase price.
Jim Coupe, managing director of Skipton International, said: “Now could be a good time for overseas purchasers to consider investing in UK property, with the stamp duty holiday due to last until 31 March 2021, at which time a proposed additional 2% stamp duty land tax charge for foreign residents will come into effect.”
What about Refunds?
The good news is overseas investors can apply for a refund of this surcharge. Legislation was released after the introduction of the surcharge which entitles non-UK residents to a refund if they pay surcharge on a property purchase and they then go on to become a resident within the UK. The legislation will allows individuals who become UK-resident after submitting their land transaction return, to apply for the repayment of the surcharge. You will have up to two years to amend your land transaction return in order to claim repayment of the non-UK resident SDLT surcharge.
However, these proposals are doing little to slow the market down. The buy-to-let market is certainly seeing strong performance right now, with enormous interest generating in the North of England. Despite the property market remaining continuously strong and high performing through the adversity of the pandemic, the pound remains at a historic low, and the UK is still likely to remain a top investment hotspot.
We have property investment opportunities available for both UK and non-UK buyers. Many of our properties also fall below the new £500,000 tax bracket.
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