‘Maybot’s’ latest edict of 1-3% additional Stamp Duty for foreigners buying property in the UK?

 

‘Maybot’s’ latest edict of 1-3% additional Stamp Duty for foreigners buying property in the UK?

Whilst it is a laudable aim to raise a few hundred million pounds for homeless people, at this critical time for the country, when you want to encourage inward investment, why stick up a notice to foreign investors, ‘we’re closed for your business’?

Clearly, the Tory Party are so worried about the existing paltry housing stock, that they want to stop non UK residents ‘pecking away’ at it.

This demonstrates how poorly they understand why we have a broken housing market. It’s all about supply and not about demand!

Planning process hijacked

The main problem is derived from the environmentalists and petty ‘tin pot’ local councilors, who together have hijacked the planning process, such that we now build a third of the properties that we need, to satisfy present demand.

In addition, only 7% of available land is build upon in the UK and we need to release some more Brown Belt and incorrectly designated Green Belt for development. The amount of car parks and wasteland that is being preserved under the auspices of environmental protection is ridiculous when this country needs housing so badly.

‘Maybot’ has promised to build 300,000 new homes in the UK, however, we are probably building only about 125,000.

Torrent to trickle

The fiscal changes to Non Dom residency, the existing hikes to Stamp Duty (even more so for foreigners) and the changes to corporate ownership of UK property, have all conspired together to reduce the demand for UK property from abroad, from a torrent to barely a trickle now.

Nationwide developers are pulling out of London likes ‘rats leaving a ship’, i.e. Barratt Homes, which will reduce the supply of new homes in the Capital even further, which will increase prices in future.

Particularly in the post Brexit era, we need to attract wealthy foreign investment to this country and not the reverse. I am sure that Chancellor Hammond can find a couple of hundred million in his piggy bank for the homeless without these imprudent, politically judicious, headline grabbing statements during the Tory Party Conference week. His budget deficit is coming down very nicely and therefore, he certainly has room to manoeuvre for these socially advantageous spending programmes.

Sleeping policemen not stingers!

In trying to slow down the Residential Property Market, former Chancellor Osborne used the draconian SDLT hikes with such severity, that he has caused a DIY recession (his expression) in certain sectors. Instead of using ‘sleeping policemen’ to calm the market, he used ‘stinger spikes’ that caused the car crash.

Historically, France, Italy and Portugal have all been envious of the UK’s ability to attract these wealthy foreign nationals and are now ‘climbing onto the band wagon’ by redesigning their own tax regimes, in order that their fiscal environment becomes more attractive.

Our Non Dom tax reforms, have not earned us a penny, but have certainly started a stampede of wealth creators who are either repatriating themselves back to their homeland, i.e. America etc, or choosing to live in a country which is more fiscally welcoming.

With all the uncertainty of Brexit, this is the antithesis of what we require today.

Call to reduce Corporation Tax

In the Autumn Statement, amongst other changes, the Chancellor should reduce Corporation Tax even further, in order to make the UK the best place to invest for both individuals and corporations alike.

What is wrong anyway, with a Singapore based, low tax environment? The Europeans will hate this with a passion, since they are burdened with their own self-imposed 35% Corporation Tax rate, which together with their archaic labour laws and strident unions, are a big ‘turn off’ for inward investment.

Whilst the Tory Party are trying to reinvent themselves, which is no bad thing, they need to think differently about our position in the World after Brexit and that we will need to be an oasis for multi-national companies. We understand if they need ‘brass plate’ offices in Frankfurt, Paris and Brussels in order to get around any regulatory hurdles that the EU may impose, but the head office should be in the UK benefiting from all the attractions that the ‘greatest city on earth’ – London – has to offer.

Note to ‘Maybot’

With the Labour Party’s reckless spending promises, the Tory Party needs to capture the imagination of the Electorate and in particular, the floating voter. Boring, ‘steady as she goes’, policies may be very responsible, but they are not sufficiently ‘pupil dilating’ and we need to step up a gear or two, to galvanise the Party’s broader appeal.