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18 Dec 2013

Foreign Property Investors To Pay Capital Gains Tax In 2015

It has been a dynamic year for the British property market and it looks as if things are set for even more changes in 2014. As construction picks up and the residential property market becomes active again, many experts warn that there might be a possible housing bubble looming.

But the UK government seems to have a plan to help avert the problem by imposing a capital gains tax on property investors overseas, in an attempt to prevent wealthy foreign investors from flooding the market which could cause a rise in prices and squeeze Britons off the property market. The news was announced by chancellor George Osborne, who said that the move will take effect in April 2015.

As part of his Autumn Statement, Osborne explained that the UK would always welcome foreign investors, but said that they should be treated in the same way as British individuals. That is why investors from abroad will also have to pay capital gains tax of 28% when they sell a property that is not their primary residence, just like Britons do.

Official figures show that over the past 12 months, property prices in London have increased by 10%, with the growth being even more dramatic in some areas of the capital city, Reuters informed. Moreover, data from real estate company Savills shows that around 70% of the newly built property in London was bought by foreign investors, the news source also reported.

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