Knight Franks reaction to the Autumn Statement


 


Capital Gain Tax – the current exemption from CGT for non-UK resident owners of residential properties will be removed.


Liam Bailey, Head of Knight Frank Global Research, comments…


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.


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% - 50% depending on the owner’s residency status.


As we noted in our recent report on International Buyers in London, while non-resident purchasers account for 28% of central London property purchases, their share of the wider Greater London market is far smaller at around 12% of all new-build property purchases in Greater London at the current time. 


OBR housing forecast


Liam Bailey, Head of Knight Frank Global Research, comments:


“The Office for Budget Responsibility’s revised forecast for the UK housing market largely concurs with our November forecast with the dual impact of the Help to Buy scheme and the strengthening economy supporting notably higher price growth in 2014 and 2015. Its view of five year house price growth to 2018 has been revised up from 15% to 27%, compared to our view of 24%. Critically, in terms of the health of the market, the OBR has revised its view of housing transactions, with a 12% upwards revision for both of the next two fiscal years, this growth is undoubtedly based on an assumption that the current market recovery will continue to spread into the midlands and northern regions.”

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