In this handout image supplied by ITV, Prime Minister Boris Johnson and Leader of the Labour Party Jeremy Corbyn shake hands during the ITV Leaders Debate at Media Centre on November 19, 2019 in Salford, England.
Jonathan Hordle | Getty Images News | Getty Images
Foreign buyers who want to own a property in England will need to pay more than a U.K. citizen, should the ruling Conservative Party stay in power after December’s general election.
The party has revealed its policy of a 3% surcharge to non-U.K. tax residents as part of a bid to take some of the steam out of the property market.
Announcing the policy, the Conservatives cited a York University study that claimed more than one in 10 new London homes were bought by non-residents from 2014 to 2016.
“This adds significant amounts of demand to limited supply, inflating house prices and making it harder for people in Britain looking to get a foot on the property ladder,” said the party.
As an example, overseas buyers would need to find an extra £50,000 ($64,400) to afford the average house price in London’s Notting Hill, which currently sits in excess of £1.6 million, according to property website portal Zoopla.
The tax, known as stamp duty, already exists for property purchases. Higher levels of stamp duty are typically applied on second home and buy-to-let purchases. It was already in line for a 1% rise for overseas buyers.
The party, which currently enjoys a healthy lead in the polls, claims it will help people get on the housing ladder by removing some foreign competition in the property market.
The Conservatives estimate it will affect 70,000 purchases per year.
Companies and individuals will both be affected but the charge only applies to properties in England rather than the wider United Kingdom.
Election property promises
The Conservatives have already outlined how they would use policy to encourage private housebuilders to build more homes.
It wants a new borrowing facility with long-term fixed rates, requiring only a 5% deposit, to help people buy their first homes. It also says first-time buyers will be able to get a 30% discount on new homes in their area.
The main opposition Labour party has taken a different tack. It wants to build 150,000 new homes a year, with 100,000 to become public housing and the other 50,000 claimed to be “genuinely affordable.”
The Liberal Democrats, which stands little chance of gaining power, have said they would build 300,000 new homes a year across the country.