Gulf-based property investors to be hit with new UK tax

  • Share via facebook
  • Tweet this
  • Bookmark and Share
(Photo for illustrative purposes only)

(Photo for illustrative purposes only)

Gulf-based investors who own residential properties in the UK will be hit with a new capital gains tax if they sell their assets after April 2015, British Chancellor George Osborne announced in his half-yearly budget statement to parliament on Thursday.

"From April 2015, we will introduce capital gains tax on future gains made by non residents who sell residential property here in the UK,” Osborne said.

Middle East investors have long been prolific buyers of property in the UK and in October real estate firm Knight Frank said they were the third most active investor group in the Greater London's prime residential real estate market last year.

Knight Frank said buyers from the region made up 7.5 percent of the total prime sales in the English capital city during 2012.

The analysis of all £1m+ sales in London over the past year showed that 49 percent went to foreign buyers, although only 28 percent were non-resident in the UK.

It also showed that on prime London sales since June 2011, 69 percent were snapped up by foreign buyers.

However, Knight Frank downplayed the impact the new capital gains tax (CGT) will have on buyers.

“Tax is not the primary driver for the majority of international buyers of residential property in London. We anticipate that the removal of the CGT exemption for non-resident purchasers will have only a marginal impact on demand and pricing,” said Liam Bailey, head of Knight Frank Global Research.

“It is important to note that the change to CGT rules brings the UK in line with other key investor markets, such as New York and Paris where equivalent taxes can approach 35 percent – 50 percent depending on the owner’s residency status.”

Related:
Companies
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

Posted by: Nisk

I am selling ............. it was a big mistake investing there

Posted by: Parham

That makes total sense. This will push all the investors to sell their properties in the uk and get back to investing in the Middle East, which I guess is good for dubai. I love it how the British politicians found a simple way to ruin their own real estate market. Thank you Mr Osborn, dubai is very appreciative.

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Do celebrity branded projects ever work?

Do celebrity branded projects ever work?

The long list of celebrity-endorsed real estate developments...

1
Is this the end of the Gulf’s Indian cash dash?

Is this the end of the Gulf’s Indian cash dash?

From currency woes to taxation loopholes closing and a clampdown...

2
Mall talk

Mall talk

Plans for Dubai’s Mall of the World have made headlines all over...

1
Most Discussed
  • 24
    World's most pierced man refused entry to the UAE

    Tolerance has its limits everywhere including Dubai and those who considered Dubai a lawless circus were held accountable...so thank you Dubai authorities... more

    Thursday, 21 August 2014 10:51 PM - Khalil
  • 23
    Baby NOT on board?

    Some of you cry babies need to get your own personal apartments on the plane ! You cry more then the babies I have seen in my travels. LOL more

    Thursday, 28 August 2014 9:10 AM - Jim
  • 21
    Israel “must be punished” over Gaza, says Dubai police chief

    This high moral ground that Mick is talking abt sound very familiar. May I remind Mick that the US & its British ally alone killed over 1 million innocent... more

    Thursday, 7 August 2014 4:12 PM - Mathew