There are occassions when the press baffle me. Take this, from the London Evening Standard, yesterday;
George Osborne's clampdown on wealthy foreigners using offshore companies to buy up huge swathes of central London will bring the top end of the property market to a juddering halt, financial experts warned today.
Thousands of homes in Kensington & Chelsea and Westminster have been bought through corporate investment vehicles based in tax havens such as the British Virgin Islands, the Cayman Islands and Panama in recent years.
These can be used to reduce, or even avoid completely, inheritance tax, capital gains tax and stamp duty.
Now. I'd call that crack down a good thing. If the price of the top London homes stops increasing, dramatically, the rate of increase for other homes will decline and maybe, just maybe, one day ordinary people in London may have a chance to live near their work, have space for their family and even own a property again.
But no the headline was:
Tax crackdown on foreign buyers ‘to hit London homes'
And the worry was that hidden money may not come to London.
The Standard needs to understand some simple truths. The first is that most of their readers are deeply worried about the cost of housing, which this tax madness has helped put beyond their reach. The second is that encouraging illicit money into London is not an economic policy; it is quite literally a criminal policy. They should as such be celebrating the crackdown. But as yet the light bulbs do not seem to have gone on in these papers.
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Well Richard, it’s presumably a bad thing for the estate agents who make their living from selling these properties to the wealthy non-tax paying foriegners, and to, shock, horror, these people themselves. But then, as The Standard is owned by a Russian billionaire, it’s not too surprising that it comes out with this kind of rubbish.
To be fair, it does have a couple of columnists (Rosamund Irwin, Richard Godwin) who have ben making the point that ordinary British people who have to pay taxes are being priced out of ever being able to own a home in London.
The Evening Standard is nothing more than a vacuous tory propaganda machine. I for one don’t take anything they say seriously.
I imagine their concern would be for their readers who have already bought a property, over priced or not, and who could be swung into negative equity by a shock to the london housing market?
It probably goes to show how complex the debate around something as important as to our lives as tax policy is and how issues are never black and white.
“The second is that encouraging illicit money into London is not an economic policy; it is quite literally a criminal policy”.
Since I have apparently not been well educated, you will have to help me again. How do we know the money is illicit and why is literally criminal.
Please go and read what is available on the web
I think, much as I hate to say it, that Google aids this process
Sorry, but it’s not my job to spoon feed you
Not often I say this but I 100% agree with you on this one, the wheeze of buying residential property in offshore companies has got to stop and hopefully the new 15% SDLT plus annual charge will do that.
Houses in central London have risen in many cases to way above £10m and that is being driven by the flight to safety for international money. They can pay the 7% stamp and possibly IHT like everybody else.
It may dappen the £2m plus market but frankly who cares, this one Osborne has been right to go for…..
The best news in a long time. No doubt it will hit prices at the upper end of the market, but at those levels people are unlikely to notice. I doubt very much it will have any real impact at a middle income family home level, but could well reduce the cost of 1/2 bed new build apartments which lots of foreign investor buy.