Britain proposes to raise foreign property purchase tax

LONDON: British Prime Minister Boris Johnson has unveiled a plan to impose a three per cent levy on the value of UK property purchases to non-residents.

It aims to prevent manipulation activities by investors thus causing a spike in housing prices in the country.

The plan was among the things the Conservatives campaigned for to win the December 12 election, based entirely on Johnson's promise to succeed in Brexit within a few months and resolve domestic issues related to education, healthcare and policy.

After succeeding as British government and nine months in power, the party failed to resolve long-term housing shortages which were among the reasons property prices continued to soar and could not be bought by British citizens themselves.

Proposals for the restructuring of the Land Tax Duty Stamp, a levy for the purchase of real estate, will be imposed on non-British companies and individuals.

The party said it aims to generate tax revenue and is expected to be able to raise revenue up to 120 million pounds a year.

London property prices are too high and its strong legal system makes the country a destination of choice for foreign millionaires to keep their cash especially investors from Russia and West Asia.

Citing an academic note, the party said between 2014 and 2016, as many as 13 per cent of new homes in London were bought by non-residents.

"It is a huge demand that is causing supply to be limited, causing house prices to rise and making it difficult for British people to buy homes in the country," he said. - Reuters