Additional 2% SDLT surcharge for overseas investors – is this dumb or dumber?
I cannot believe my eyes when ‘proud as Punch’, the Revenue confirmed today that the ridiculous SDLT surcharge for overseas investors buying residential property, will be implemented after all.
Cranking the thumbscrew
The Stamp Duty escalator, put into effect by the former Chancellor, hasn’t done enough damage or distortion to the residential property market already, without this further cranking of the thumbscrew.
When this was introduced in 2014, annual Stamp Duty receipts were approximately £12.5billion and the OBR (Office for Budget Responsibility) predicted this would rise to £19.5billion by 2020. Yet today, it is closer to £ 7.5billion for residential sales and no doubt, after this overseas surcharge has had its affect, it will be even less.
Dumb and Dumber…
Now we all know and understand that it appears that the housing stock is finite and we annually now build approximately half the required new homes ie 150,000 (private and affordable) that we need to sustain ourselves ie 300,000, but instead of increasing the supply which brings valuable foreign earnings into this country, the Chancellor, in his infinite wisdom, is trying to curtail the demand by this surcharge tax. Dumb and dumber springs to mind.
… industrial strength constipation
I applaud the Tory administration’s valiant attempts to bypass the planning chicane which, through its petty, political antics, is restricting the supply of new homes by expanding the permitted rights initiative, which allows commercial premises to be changed to residential use, without needing planning consent. However, wouldn’t it be better if there were a ‘Dominic Cummings’-driven root and branch reform of the planning processes of local councils, so that worthy consents pass through this system like ‘a dose of salts’, instead of being blockaded by industrial strength constipation?
In the post-Brexit era, we are going to need our foreign investors more than ever before. Osborne has foolishly withdrawn the non-domiciled tax status for a good number of international residents, which has cost the Treasury at least £ 3billion and isn’t it coincidental that the socialist regimes in France, Italy, Portugal and Spain, have changed their tax laws so as to give these wandering, wealthy refugees, a safe fiscal haven in their respective countries.
They cannot believe their luck. If we, the UK, are stupid enough to expel these cherished wealth creators, they are going to benefit from the inward investment that they bring in truckloads.
Why do we consider aping the benefits of being a ‘Singapore-on-Thames’, such an unworthy unmeritorious aspiration? This would attract the wealthiest brains of the world to our shores, in order to benefit from an attractive fiscal environment, much to the chagrin of our former European partners, with their highly unionised and regulated working practices, made worse by their Neanderthal labour mobility, which has been the hallmark of the socialistic continent of Europe for so long, and has reassuringly delivered a permanently high unemployment level of 9%, for their countries.
Doting respect to the Red Wall
Whilst I understand that Boris wants to level the country and pay doting respect to the Red Wall, this should not be mutually exclusive to encouraging investors from abroad to bring their bounty with them, which we need so badly, particularly in the post-Brexit era.
If you said that the government had missed a trick here, you would be the King of understatements.