Profits from property are tax free..........

[tomdhu]

...... but not for you or I who reside here in the UK and are subject to tax though.

Let me tell you about my recent experience.......

We looked at several properties recently with a view to purchasing and I deliberately made the point of enquiring who actually owned the property being sold. We found that more than 50% were owned by foreign residents ( ie non-doms), foreign trusts or off-shore companies.

All of these owners are exempt from Capital Gains Tax on the disposal of the property plus they do not pay income tax on the rental revenue if the property is let out to tenants.

This represents a massive return on capital that is "as safe as houses" -all at at a time when property is increasingly out of reach of ordinary locals. An average London starter home is valued at around ?485,000 which is circa 19 times the average salary. When I bought my first house, I was limited to 3 times salary.

The situation is plainly crazy in London.

This week, a leading bank in Singapore announced that it was suspending mortages for Singaporeans buying property in Lonond because of the post Brexit risks. Singaporeans already own huge swathes of London - alongside the Chinese, Arabs etc etc...

Also, thousands of foreigned-owned houses in London are kept empty for around 8 months of the year and this impacts negatively on local restaurants, shops and services.

Why doesnt the chancelleor impose an annual tax on foreigned owned property just like they do in France, Germany etc

etc?

Why doesnt the chancelleor impose CGT on property owned by off-shore interests?

Something needs to be done!

[Robert Poste's Child]

I guess all tax treaties will be up for renegotiation once the next PM flicks the Brexit switch. Though if it's still a Tory they'll probably continue to support loopholes for the rich.

[ianr]

Private Eye has been exposing this for some time. Their database of England & Wales property acquistions by offshore companies 1999-2014 shows 975 in Southwark. http://www.private-eye.co.uk/registry

[tomdhu]

Robert Poste's Child Wrote:

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> I guess all tax treaties will be up for

> renegotiation once the next PM flicks the Brexit

> switch.

I'm pretty sure that CGT and tax on rental income is not covered by any treaty.

CGT exemption for non-doms started out in the 18th century when army officers were posted overeseas on long term tours. Tax on rental profits are just like any other income taxie the chancellor set it at any rate he wants. It's just more difficult to collect when it is a foreign company or offshore trust.

Hence the best way is an annual flat rate annual tax based on the value of the property. In addition you could have a higher stamp duty rate on initial purchase if the purchaser is a foreigner or trust.

Get this sorted (gradually) and ordinary people in London will be able to afford housing once more.

France and Germany have an annual tax. Why not the UK??

[Burbage]

tomdhu Wrote:

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> Why doesnt the chancelleor impose an annual tax on

> foreigned owned property just like they do in

> France, Germany etc

> etc?

There is ATED, a shiny new annual tax on dwellings that owned by companies. There are, of course, exemptions for dwellings that are rented out, open to the public, 'being developed for resale by a property developer' or not worth much, but it is at least something, and offshore companies have to pay it, too.

The 2014/5 returns show ATED raised about ?120m on the back of about 4,000 declared properties (half in Westminster), which doesn't seem very much. However, they've since lowered the threshold (twice - it's now ?500k), so it might do better in future.

> Why doesnt the chancelleor impose CGT on property

> owned by off-shore interests?

He now does. That doesn't mean anyone will pay it, as there are plenty of exemptions here, and it only affects the rise in value since April 2015. But it might have an effect, especially on those using offshore vehicles to try to dodge inheritance tax and, alongside the stamp duty increase for companies (now 15% - with similar rules as ATED), might do something to reduce the amount of empty housing.

It's all very slow, and might not have a positive effect at all. The trouble with land/property taxes - or any taxes on the rich - is that it's invariably the poor who end up paying them indirectly through higher rents and prices.

[Lordship 516]

I worked in China for 7 years until 2012, my wife is Chinese. At that time a foreigner who wished to buy property had to have lived & worked in China & be in possession of a Registration Certificate for one year before they could purchase a property. This was relaxed last year but a foreigner is still restricted to buying one property in Beijing & Shanghai & then only to live in it. In other cities where there are plenty of vacant houses there are less limitations - the Chinese are not stupid, they just want your cash & they are likely to change the law at any time, so no security there.

We ought to have restrictions in place. I was at a meeting where there was a director of a HA who refused to rule out selling in HK, Singapore & elsewhere. There is a slight restriction whereby properties have to be offered [advertised] first in the UK but the developers merely play a game with this and it is essentially not a restriction - only window dressing. Much of the time the agents sell off plan in Singapore, China, HK & Taiwan and you can see signs of 60% presold all over London. These are sometimes let out but quite often left empty. At 0.5% interest rate, these purchases are regarded as safer & more profitable than bank deposits.

The Chancellor could bring in a restriction on foreign buyers that would limit their purchases to properties over ?2million or even ?3million. This would release quite a few lesser priced developments for UK purchasers & curb foreign purchases but developers would be unhappy as they want inflated land values & house sales. This won't happen as too many of Cameron/Osborne/Blair & co's mates & families are in the property 'game' which will continue in play.

There is the annual ATED & CGT but the Chinese & other foreign buyers merely shrug their shoulders at that and keep buying - the annualized growth is more than they pay in Council Tax, ATED & CGT. For CGT they are happy to pay as this is only levied when they have realized a profit. Their play is security for their capital & capital growth. Up to now they have been happy to pay the Council Tax, often pay a managing agent to oversee security on empty properties and may swan over a couple of times a year to shop in Bond Street, attend Ascot or Wimbledon, attend Opera and/or hold the properties for their kids or relatives that will attend university here. I know several Chinese kids who are living in multi-million properties close to their university - no problem.

I did consultancy work over there for FDI companies and also lectured in econometrics for a time at a Fudan/MIT program in Shanghai but it only lasted one year. I asked my wife's cousin who was a student what he reckoned the problem was and he told me that they thought my analysis was too "political"; they didn't like the truth to be too blatent - so not much different to the West or Westminter where you can only be favoured if you will pander to their ideology. I couldn't be bothered to deliver their message so I resigned.

The City of London & the Barons of England have traditionally controlled land supply & values since the Middle Ages - this runs diametrically contrary to providing decent housing for all at a price that a normal worker can afford either to buy or rent.

Until this issue is addressed in an enduring manner there will always be a housing shortage. There is also the parallel problem of immigration that puts further pressure on housing supply - immigration has largely been driven by a need for willing & trained workers. Skills training has been dumbed down for the last 25 years or so with the result that the Polish & other Eastern workers are now dominant not only in the construction industry but throughout the UK where skills are in demand - engineers, bakers, printers, hospitality etc. We need to get back to the traditional apprenticeships [not these 6 month & 12 month courses] and this will go a long way towards substituting immigration and also addressing young men's training that has been identified as a social problem.

[Tracey Forest]

Hi All

Not sure if you're aware of this but quite a few buy to let mortgaged landlords are facing a huge increase in tax over the next four years. Now whether you agree or disagree with private landlords living and breathing in society I don't think you can argue that a business shouldn't lawfully offset borrowing costs if the borrowing is for the running of that business.

Please take a read here and let me know if you think the tax is unfair. Please copy and paste into your browser if you can't click to link. https://www.crowdjustice.co.uk/case/tenanttax/

I'm unashamedly asking for a donation if you agree with our position on this matter. We've employed Omnia to help us with our court case. We're still waiting to hear from the CPS whether we've got a decent chance of winning but all donations are recorded so we know where they came from.

Many thanks in advance to taking a look - tenants and landlords alike are affected by these tax changes so please take a look.

Kindest always

Tracey