Anticipated Proposals Concerning Capital Gains Tax on Foreign Individuals Buying In The UK.

 

Anticipated Proposals Concerning Capital Gains Tax on Foreign Individuals Buying In The UK.

The socialists would have us believe that they would like to stop foreign individuals enjoying a Capital Gains Tax free environment in London and, as such, the Lib Dems have pushed the Tories into considering imposing this tax.

The truth is that it will not even raise  £100million that means it will probably not even pay for itself.  The taxpayer will therefore subsidise the cost of raising this tax.  Is this daft or not?

Since the budget of 2012 taxes on corporate bodies buying in this country have risen by 300% added to which a further tax is applied on an annual basis and this is before we consider the negative effect of Mansion Tax that the socialists want to impose at the next election in 2015.

This triple ‘whammy’ is serving to reduce the number of foreign buyers in the market place to the extent that along the north west London corridor transactions have been reduced by 50-75%.  Values are in retreat and this could be a full-blown recession in property prices.

Whilst properties in the £500,000-£2million range are doing well at the moment with good liquidity and about 5% growth above £2million the market is increasingly sceptical where transaction costs are now 10% of the purchase price.

Buyers in this bracket are holding off purchases until the Election result is known in 2015 that is what is stagnating the market in this price range.

These three taxes are already conspiring together to reduce the appeal in London and prices will start to fall with the associated problems of negative equity.

Lest we forget tax is a device to raise money for the Revenue that it will spend on welfare and growth producing investments.

A tax that will not pay for itself is foolish and it will reduce the numbers of buyers coming to this country with its perilous knock on effects on the markets and growth.