Lack of transparency on overseas property valued at £56bn
The campaign group says it is not possible to determine the true owners of some 87,000 properties, with an estimated value of at least £56bn according to Land Registry data – and likely to be in excess of £100bn when accounting for inflation and missing price data.
Some 40% of the anonymously owned properties identified are in London. Cadogan Square in Knightsbridge, where the average property price exceeds £3m, is home to at least 134 secretly owned properties. Buckingham Palace Road is also home to a large number, with an estimated value of £350m.
As of March 2019, the areas with the highest number of anonymously owned properties according to Global Witness analysis are Westminster, with 10,000; Kensington and Chelsea (5,729), Camden (2,320) and Tower Hamlets (1,930).
What will be the impact of tax on capital gains for overseas buyers?
The government underestimated the rules’ impact on tax-exempt investors (such as pension funds) and offshore funds but now recognises that exempt investors should be no worse off than if they had invested directly in land, and that no double taxation should arise where sales are made by a fund and the proceeds passed to investors.
The government’s neat solution is to allow funds to be treated as transparent or exempt for capital gains purposes, allowing gains to be taxed at the investor rather than fund level, with the result that those gains may not be taxed at either level in the case of tax-exempt investors.’
Off-plan property investments fail to pay off
Overseas investors who put down deposits as high as 80% on property developments in northern cities such as Liverpool have been left struggling to get their money back when the buildings failed to materialise.
You may well shudder at the idea of handing over 80% of the price of a buy-to-let before anything has been built. Yet this is a fairly established model known as “buyer-funded” development, or “investor-led fractional sales”. It puts the financial burden on the end-buyer rather than the developer.
A Place in the Sun Live Manchester Highlights 2019
And just like that, the first A Place in the Sun Live exhibition of 2019 concludes at the Manchester Central Convention Complex, with yet another three days of overseas property action taking place in the North-West.
Over the weekend, we welcomed just under 5,000 individuals through the doors who were looking for guidance on how, what and where to purchase a property overseas, all with different budgets and preferences.
Fortunately for them, we had plenty of exhibitors in attendance representing a host of countries, including Spain, France, Portugal, Italy, Cyprus, USA and Turkey, ready and waiting to answer their queries. This included estate agents, legal, tax, currency and removals specialists, meaning that our guests left fully informed and ready to plan ahead.
Brexit: Is it Time to Repatriate?
Hard Brexit, soft Brexit, no Brexit, our news channels are bombarded daily with apocalyptic predictions for what to expect in the aftermath of however Brexit takes place next year. There’s no doubt that, however it happens, Brexit will have far-reaching consequences not only in the UK and EU but also worldwide. One sector that is already feeling the financial impact is the overseas property market within Europe. So what’s been happening since the referendum, and what can UK citizens who own property overseas expect post-Brexit?
Living and buying overseas is now more expensive
Since the Leave vote in 2016, we’ve seen sterling tumble in value – falling by 12% against the Euro and 5% against the US dollar. This means the pound won’t buy you as many Euros. Consequently, not only has the cost of living escalated for Expats living off UK savings or earnings, but it also means that buying a property within mainland Europe is now more expensive than it would have been pre the referendum.
Loss of EU member state perks
In terms of the housing market, it’s not just currency rates that UK investors need to be mindful of. Becoming a non-EU citizen may affect the deposits purchasers need to put down – from 20% for EU citizens to as much as 49% for non-EU citizens. Tax breaks will also be affected, especially if the UK leaves the European Economic Area. Currently, UK homeowners only pay 19% tax on gains from renting or selling properties, whereas again this could go up to as much as 49% for non-EU citizens.