The United Kingdom’s Labour Party has proposed a tax levy that is considered as rather hefty when paired with other residential taxes. The aim of this additional tax aims to force foreign entities that are purchasing up scores of residential properties in the U.K to have to pay taxes on the property. As it stands now, many locals are being forced out of the real estate market due to the plethora of foreign investors. Local businesses have suffered as well, since often the residential properties are purchased and then not occupied. Unfortunately, a look at other countries who have implemented increased taxes on foreign investors shows that the increased taxes does not seem to slow the interest by foreign investors. The Institute for Fiscal Studies has concerns this tax proposal will be ineffective and will fail to bring in significant revenues.
- Foreign buyers make immediate use of the local infrastructure funded by other taxpayers. So why not ask for some contribution towards that.
- In Australia, the state of New South Wales levies additional four per cent of tax on foreign buyers, Queensland three per cent and Victoria has now increased its levy to seven per cent.
- The point is that there is a living laboratory which shows that higher taxes on foreign ownership of residential property has not made any significant dent in demand.
“The point is that there is a living laboratory which shows that higher taxes on foreign ownership of residential property has not made any significant dent in demand.”