The stamp duty surcharge for non-resident investment buyers announced in yesterday’s Budget is dwarfed by discounts they receive thanks to the Brexit-inspired fall in Sterling.
That’s the view of Zoopla’s director of insight and research Richard Donnell, who says that dollar-denominated buyers in particular may find the additional two per cent SDLT surcharge from April 2021 will be small by comparison with the effective discount of over 20 per cent following Sterling’s slide in recent years.
“The additional two per cent stamp duty surcharge for non-UK resident buyers represents the latest in a long series of tax reforms, and may have a short-term impact on demand in higher value markets once it is introduced” says Donnell, in the latest response
“For those who are looking at a longer-term hold, the additional upfront purchase cost will diminish in significance over time. In the interim, however, there will likely be some increased activity among non-UK residents looking to purchase before the new rules come into force” he continues.
Donnell says it was perhaps unlikely that Chancellor Rishi Sunak would ever reform stamp duty for the mainstream market, given that it currently lines the Treasury’s coffers to the tune of £8.3 billion as of March 2019, up from £2.7 billion 10 years’ ago.
The Zoopla guru adds: “Stamp duty has become a Southern tax, and is widely regarded as one of the biggest inhibitors to market liquidity in London and the South East - from which 61 per cent of SDLT receipts are generated. In keeping the tax bands unchanged and not in line with price inflation, 2.7m homes have been pushed into the five per cent band since 2015.”
You can see a summary of the Budget proposals affecting agents here.