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Property Wealth Tax proposed by former agency boss

A wealth tax on overseas owners of UK homes could raise £5 billion a year to help local people buy their first properties at reduced rates, a former estate agency chief has suggested.

Kevin Hollinrake - a former chairman of Hunters estate agency chain prior to its acquisition by The Property Franchise Group - is now Conservative MP for Thirsk and Malden.

He told a debate in the House of Commons that the government had to strike a balance between personal freedom to buy homes wherever an individual wanted, with the broader freedom of local people to afford homes in their own areas.

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One suggestion he had was to increase taxes on non-resident purchases of additional homes, whether holiday properties or buy to lets or occasional residences.

He told MPs: “I do not think there is any argument for not taxing those people pretty heavily if they own property in the UK and are non-resident. 

“We already have a two per cent surcharge, on top of the per cent surcharge, for overseas owners. These people are having a profound effect on some house prices in urban areas as well as rural areas. 

“I think 28 per cent of properties sold above £2m are bought by overseas owners. Around 20 per cent of all properties in London—and probably a decent quantity in York and other cities—are owned by overseas residents. I do not see a reason why we would not seek to tax those people even more heavily than with a 100 per cent increase in council tax.”

Hollinrake went on to say that a one per cent wealth tax on UK properties —bought by non-UK residents - would raise up to £5 billion a year. 

“There would still be an incentive for those people to invest their money in the UK, which I am not against, but the reality is that this would make it a fair and level playing field. They would still benefit from the very high house price growth. 

“As we have heard today, house prices have been rising by around 10%, so it still makes sense for people to invest, but such a tax would mean that we could take a little bit out of the money they are making every year from house price inflation and put it elsewhere.”

The former agency chief said the revenue from such a property-related wealth tax could go into the government’s First Homes programme, which offers new-build discounted properties to local first time buyers. 

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    I like Kevin, but this is obviously nonsense!

    If you are a "non resident" with more than one property anywhere in the world you now pay 5% extra in SDLT on top of the usual stamp duty.

    I find it a rather grotesque that MP's who at the last election campaigned on the basis of "Get Brexit Done" with a view to making Britain more "global" and "outward looking", should now be proposing ever more punitive taxes on foreigners!

    I'm also not sure its a "good look" for someone who has made their money from the property industry to start campaigning for a "mansion tax" less than a year after they sold out.

    The LibDem / Labour "Mansion Tax" proposal (1% on properties over £2m) was spiked by Osborne's new 7% level in 2012 and later the 3% additional homes surcharge announced in the 2015 autumn budget. Tory chancellors from Osborne to Sunak have all pointed to the same excuses for "new" property taxes and yet it's never enough. If the Government can't solve the issues KH highlights with the additional 5% that they're already taking then I suggest the problem is the way they spend it rather than the amount.

    What would help would be for them to leave our industry alone for a few years rather than their incessant meddling hither and thither.

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