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Autumn Statement: CGT imposed on foreigners selling UK homes

Autumn Statement: CGT imposed on foreigners selling UK homes

The chancellor has announced that foreign owners selling UK homes will face a capital gain tax.

During his statement, Osborne said he welcomed foreigners buying homes, but claimed it was 'not right' that foreigners do not pay capital gains tax if they sell a home that is not a primary residence.

'In future foreigners who sell second homes in the UK will have to pay capital gains tax,' he said.

This measure, which was widely expected, is aimed at preventing a housing bubble, particularly in London and the South East.

As recently as last week, the Bank of England has started to withdraw some of its support to the housing market by, restricting access to mortgages for its Funding for Lending scheme in 2014.

In addition, Osborne has announced a further increase in stamp duty land tax (SDLT). Over the past decade, Treasury has collected more than £45 billion in stamp duty receipts.

Currently, SDLT starts at 1% on sales between £125,000 to £250,000 rising to 3% on sales of up to £500,000 and 4% on houses costing up to £1 million.

This week, tax advisors at PwC have called for Osborne to reduce the tax on homes between £250,000 and £300,000. They estimated the reduction to cost the Treasury about £150 million.

Brisith householders pay the highest property taxes in the developed world.

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