Tax may dim London's allure for foreign property buyers

[LONDON] A NEW capital-gains tax on homes sold by people living abroad, plus a growing British economy that's lifting the currency, may dull London's appeal to property buyers from abroad.

But the government "will put people off by changing the rules constantly and making it less tax-friendly for buyers," Andrew Sneddon, head of tax law at legal firm Trowers & Hamlins, said by phone. "If these wealthy buyers choose to go to Monaco, Paris or New York to spend their summers and their money, what's that going to cost the UK economy?"

In the years after the financial crisis, an investor-friendly tax regime and the pound's falling value burnished London's status as a magnet for foreign property investment. Investors from the Middle East to Asia splurged, buying everything from multi-million-pound mansions to apartments in Battersea and the City of London.