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May plans to hike UK property tax for foreign buyers

London

FOREIGN buyers face higher taxes on their purchase of homes in the UK as Prime Minister Theresa May starts unveiling policy plans before her Conservative party conference. The government said it will launch a consultation to increase stamp duty on individuals and companies not paying tax in the UK.

Ministers are considering a rate ranging from 1 per cent to 3 per cent, according to the Sunday Telegraph newspaper. The move is likely to add to the pressure on the country's property market.

Bank of England Governor Mark Carney told senior government ministers earlier this month that a no-deal Brexit could see house prices plummet by more than 35 per cent, according to people with knowledge of the matter. "Further taxes on international buyers sends out a conflicting message about post-Brexit Britain being 'open' to the world," said Faisal Durrani, head of research at property consultants Cluttons. "We will have to revisit our residential forecasts with a view to making further downward revisions should the international residential surcharge be confirmed."

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The UK's imminent departure from the world's biggest trading bloc is already weighing on property values in London, where house prices posted their biggest decline in almost a decade in July. "Currently foreign buyers can purchase homes in the UK as easily as people who live here, but there is evidence this is inflating house prices," the government said. BLOOMBERG

READ MORE: Let's come together: PM May appeals to Tories to unite behind Brexit plan