To think the mayor of London should introduce a non resident property tax of 15%

[Mumcouchtotri]

London prices a few years ago were insane. But they have carried on going up.

A 15% tax to stop people speculating, much like Vancouver or Singapore has would reduce this rampant inflation IMO.

[jay55]

Yup empty property and overseas owner should have massive property taxes. If it's let then less but still something more than now.

[blueturtle6]

But even rental is in such demand they may end up passing that cost to tenants, making saving for deposit even worse

[yoyo1234]

YANBU something needs to be done (though not sure what).

[Twogoats]

Foreign buyers can only buy if no British person puts an offer in?

I can't think of a workable solution though!

[DiegeticMuch]

I'm concerned that the tenants would suffer.

[lizzieoak]

I'm not sure it's going to work in Vamcouver. Something has to be done, and it's a start, but the kind of money we're talking about, I'm not sure it would slow them down. An absent owner prohibition maybe - you have to have consistent residency for 8 months of the year or something?

[wasonthelist]

Wouldn't this breach EU free trade rules? Does anywhere else in the EU do it?

[AnyTheWiser]

15% of what? The value of the property per year??

[wasonthelist]

you have to have consistent residency for 8 months of the year or something? Very hard to enforce surely?

[PerspicaciaTick]

I'd set it up as a special, higher band of stamp duty for non-resident buyers or companies not paying tax in the UK. Probably at 25%.

[NewsReview]

God something really needs to be done. There are whole streets in the most expensive areas of London that are barely inhabited at all. Just places for dodgy oligarchs to plant their cash. Blocks of flats are built and every one sold to overseas investors for a bomb. People on average or even above average salaries just can't get a look in. It's hideous and utterly wrong.

[maninawomansworld01]

As much as I am an ardent capitalist and hate what I see as meddling in free trade , I actually think that this is not a bad idea (anyone who knows me should be fainting right about now).

It would have to be higher though, a lot of these foreign investors have seriously deep pockets. They will just have to hang on to the property for longer to make the numbers work for them, which could end up tying up housing stock for longer.

I might go down the route of a much higher tax rate to non uk resident upon the sale of the property, or even a French style system that limits the sale value of the property. Say the investor buys for 500k, spends 50k on renovations (so 550 total spend). They sit on the property for 5 years, inflation is at (say) 2% that gives 607k. Then give an allowance above that for a reasonable return (maybe another 2% pa) and stipulate a maximum sale price of £665k.
They can still realise a decent profit so no one can claim its unfairly restrictive but it will stop people selling the properties on for triple the price they paid for them a few years before and should take some of the heat out of London house prices.

Another idea might be to simply get each borough to set and abide by a maximum % of homes that can be owned by non British people. Once the quota is used up then no non resident can buy until another non resident chooses to sell.

[WombOfOnesOwn]

Why do you think the tax would need to be steeper? In Vancouver, overseas purchases went from being 16 percent of the market to being less than 1 percent. Their housing prices were out of control to nearly the degree London prices are. Do you believe there is a specific difference in the markets necessitating a higher tax, or just a feeling?

[bibbitybobbityyhat]

Yadnbu. It's a scandal. The sort of thing that kicks off revolutions. Could do with a [red flag] smiley.

[maninawomansworld01]

I believe the tax would need to be steeper to kerb the foreign investors because lots of them have extremely deep pockets,and another 15% isn't going to bother them.
I know of someone (friend of a business associate) who bought 3 flats at the Candy brothers development recently (can't remember what it's called) and he would have literally paid another couple of million on each of them in order to get his hands on them. 15% is fuck all to people like that which is why I'd favour some kind of system to limit foreign ownership in areas of high pressure on housing.

[maninawomansworld01]

Vancouver is lovely (I have relatives there), but in terms of desirability of property its not London and never has been.

[DeliveredByKiki]

What about people who buy property, live in it, then keep it if they move abroad? Asking because that's a situation we and a lot of our expat friends are in - it's the only property we own, we intend to eventually move home and then sell it so we can live somewhere else in the UK. Can assure you our pockets are very shallow and the rent just bout covers the mortgage.

Also if there were to be stipulations on foreign investors, it's def fairer to say only a % can be bought by non British residents as opposed to non British people. Plenty of "foreigners" who live in the UK, work there, pay taxes etc etc but are not British citizens but should still have a right to own their own home in the country they reside in

[flummoxedlummox]

A council tax based on residence nationwide might help dampen prices in all areas that suffer from second home issues. Maybe triple for non-permanent resident? It may also help reduce empty run-down property numbers as well.

[lizzieoak]

I don't think the Vamcouver tax has been in place long enough to know if it's effective, it was only introduced in July. The Ministry of Finance claims it's worked but they would say that, wouldn't they? They know they'll lose the upcoming election on this issue so they need to be seen to be proactive. So my trust level is low at this stage.

Vancouver is not London, that's for sure, but it's ridiculously unaffordable. You'd be hard pressed to find a 3 bedroom house (very average house) for under 700,000 pounds. Even professionals are priced out of the market. I've read of couples where one is a dr & the other is an accountant having to build a granny flat home in their relative's back yard in order to stay. Lots and lots of money from China (Vancouver is a very multi-cultural city, there is no racism in this view, the housing prices drive all non-millionaires crazy, inc regular income Chinese and the 2nd, 3rd, & 4th generation Canadians of Chinese ancestry).

[BadLad]

Does the mayor have the power to introduce such a tax?

[RobinHumphries]

Can the rest of the country adopt this tax too? Might mean locals could actually afford to live in Salcombe, Fowey etc etc

[lizzieoak]

The problem with it going on just one city is that the money then just moves somewhere else. It needs to be tackled at a national level. And stricter controls on people using property to launder money as well.

[MissMargie]

Britain is a stable country, as is, say, Australia, so those from abroad with millions to stash will buy up stuff. I don't see how you can stop it.

Falling prices is the only thing that will stop it imv.

There could be a rule about properties not being empty but difficult to enforce.

[WhiskyTangoFoxtrot]

Yes, this can only be a post-Brexit policy. Interesting to see (for a change) support on MN for being outside EU.

Londoners being priced out of Londin never received the sympathy of locals being forced out in other areas. But it's what fuelled the prices that mean everywhere is so goddamned expensive now.