Tories plan extra land tax for foreign buyers of UK homes

London

BRITISH Prime Minister Boris Johnson's Conservatives will introduce a land tax surcharge for foreign buyers of UK homes in an effort to damp demand, keep a lid on house prices and make it easier for first-time buyers to get a foot in on the housing ladder.

The 3 per cent surcharge - on top of the existing land tax known as stamp duty - will raise as much as £120 million (S$210 million) a year, which will be put towards programmes to help tackle homelessness, the Tories said in a statement. It would deliver a policy that the ruling party said in February it was considering introducing.

"Evidence shows that by adding significant amounts of demand to limited housing supply, purchases by non-residents inflate house prices," chief secretary to the Treasury Rishi Sunak said in the statement. "That is why we are introducing a higher rate of stamp duty for non-UK residents that will help to address this issue."

Housing is one of the key issues for voters as parties vie for support ahead of the Dec 12 general election. Politicians from all the main parties are vowing to step up homebuilding to ease a shortage that's pushed up prices and made it harder for young people to buy their first homes.

The Liberal Democrats on Thursday evening pledged to build 300,000 new homes per year - including 100,000 for social housing - if they are elected.

That compares with the most recent government data indicating some 240,000 new homes were added in 2018-19.

Also on Thursday, Labour published its manifesto, pledging to build at least an additional 150,000 council and social homes per year. BLOOMBERG