15°C In general terms, yes as a foreigner you can buy property in the UK, even if you are not a UK resident. This means, buying property in the UK as a foreigner is easier if you are a cash buyer – i.e. do not need to apply for a mortgage or additional borrowing as there is a procedure in order to apply for such a mortgage.
Property acquisition is not legally restricted for expats in UK. Non-UK residents or foreigners can apply for mortgage in UK. However, those with less than two years of residency in the UK and without a job may face more stringent requirements and require a larger deposit.
Buying property in London is a great investment. Historically London has always performed better than the of the cities in UK territory.
Stamp Duty Land Tax (SDLT) is a tax payable to the government on all property purchases over the value of £500.000 until 31/3/2021. This is eligible for first time buyers or previously owned a property. More information is available online at www.gov.uk/stamp-duty-land-tax .
A freehold means you own the property and the land it is built on, for an indefinite period of time. Leasehold is a property you own for a specific amount of time, but it does not include the land it is built upon.
In case a lease is below 80 years unexpired when you seek to extend it then as part of the price you have to pay what is known as a marriage value to the freeholder. By law you will not be eligible to compel a lease extension until you have owned the property for two years but that doesn’t stop the freeholder agreeing to give you one in the meantime. A solicitor is required to handle all the legal documentation for extending the lease. A valuer or chartered surveyor is then required to put a value on the lease extension; a fixed fee is normally charged to prepare this report. Usually 90 years are set for lease extension, added to the remaining lease years, and fees are highly depended on the remaining years of lease, the property value and ground rent price.
It’s quite common for everything to take several weeks from first viewings to picking up the keys, and it can sometimes run into months depending on several factors such as if you will apply for mortgage, etc. If for instance the property you’re buying is vacant and you don’t need a mortgage, you could complete the sale or purchase in just a few weeks.
Choosing the right solicitor I similar to select a suitable pair of trainers, you need to feel comfortable to use them, they need to provide the right amount of support, and they need to be able to keep pace with what your situation needs. A solicitor will undertake all conveyancing work including handling contracts, requesting searches, dealing with Land Registry and agreeing on a date for exchange of contracts. A good solicitor will keep you updated and support you throughout the whole buying process. Exsus Property investment team, sets high priority to the security of our customers, hence through our highly qualified and experienced staff you can access to conveyancing services, something very important to ensure you go through the house buying process as smoothly as possible.
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If you are wondering if you can buy property in the UK as a foreigner, the answer is – yes, you can!
You may, however, have to adhere to different terms with regards to taxation and you will need to familiarize yourself with UK property terminology. We at Exsus can help you with your onward journey.
Firstly, you can own property in two different ways. You may purchase a property and own the freehold, or you may own it as a leasehold. Below explains the difference between a freehold and a leasehold property.
What is a freehold property?
In England and Wales, a freehold means outright ownership of the land and the dwelling that it sits on it. Most houses in England and Wales are owned on a freehold basis.
What is a leasehold property?
A leasehold means you only own the property for a fixed time. The duration is typically specified in a legal agreement with the landlord (the freeholder). Most flats are owned on a leasehold basis, as are houses that are bought through shared ownership schemes.
As of 1st April 2021, a new 2% stamp duty for non-UK residents was imposed, on top of the value of the property.
If the overseas investor is a first-time buyer in the UK, and the property is under GBP 300,000 in value, then the tax paid is zero. Only the 2% stamp duty is payable.
If you buy to rent, you need to know that any rental income tax applies to any income generated by rent, and will need to be paid at the end of a tax year.
For British and EU citizens, a personal allowance can be deducted before the payment of any property income is charged.
This allowance is GBP 10,600 for 2015-16 tax year, then is taxed for everyone accordingly:
In case a company buys a property, only the fixed rate of 20% is charged.
Non-resident landlords must fill a Tax return form with HMRC at the end of the tax year. They are still eligible for deductible expenses, such as insurances and wear and tear allowance of 10% of the gross rent.
A Mortgage is not easily offered to non-residents. If a non-resident manages to obtain a mortgage, they will need to contribute a 5%-40% deposit on the total value of the property. This will depend on the bank’s policy.
Research: Good investment properties must be in areas where there is a supply shortage vs demand, areas that are undervalued and are regenerated, and/or properties close to an Underground or Railway station. We regularly read relevant reports from government and private sources so we know what the trends are, the changes, the risks, and new opportunities in the market so we can advise you accordingly.
We can show you a full range of residential properties in prime locations as we collaborate with professional developers and estate agents.
Offices is a good choice. We follow the trends of the market and we can advise you which is the best area for offices to invest in the UK at the moment.
If you wish to invest in student accommodation property, the building should be sited near a university or college campus as all students prefer accommodation to be close by: vacancy rate is low.
If you are interested to invest in completed Care homes, this is an investment with real cash flow potential. Above all, the vacancy rate here is very low.
Property due diligence check list: This reduces the risk of bad investment and is comprised of comparison of sales and rentals, competition in the area, finance condition of the tenants and market trends.
Property search: After we understand your needs, we will research to find out which property is best for you. Α solicitor will search the Title and of any risks which might be related to the property for sale.
Nothing is without risk in life, but property in the UK now is very stable.
What are the Tax Implications for A Foreign Investor buying a UK Property?
If you are a non-resident intending to purchase a property in the United Kingdom for the purpose of renting it out, the HMRC has clear tax regulations. Additionally, you may be required to pay tax if you sell property or land in the United Kingdom and make a capital gain. If you live overseas for six months or more every year, HMRC classifies you as a ‘non-resident landlord,’ even if you are a UK tax resident.
There are various tax requirements and restrictions that non-residents should be aware of when purchasing or disposing of property in the UK. These include the following:
– Non-UK residents and non-UK domiciled persons are frequently exposed to UK inheritance tax as a result of their UK residential property ownership. You can take the help of a tax expert to take guidance on this matter.
Even if you have no intention of becoming a resident in the UK, or if you purchase a residential property in the UK, you will be subject to inheritance tax. On death, 40% inheritance tax is levied on the value of all UK situated assets for the non-UK domiciled individual’s (whether they are UK residents or not). In certain cases, an individual’s debts may reduce the amount subject to inheritance tax. It is worth noting that property transferred between spouses is normally tax-free (subject to certain limitations when you pass the property to the surviving spouse, who is a non-UK domiciled individual).
In the United Kingdom, you can limit your liability to inheritance tax by getting a mortgage on the property at the time of purchasing. Additionally, you may decide to seek life insurance to cover any inheritance tax liability associated with the property’s equity.
– The recent increase in the SDLT has impacted all property acquisitions. Non-resident persons, businesses, and trustees will pay an additional 2% stamp duty land tax (SDLT) on residential property acquisitions from 1 April 2021. You may take exemptions if the entity is in a lettings business or a developer. From 1 October 2021, the following standard SDLT rates will apply to purchasers who are individuals:
UK property current residential rates
Property or lease premium or transfer value | SDLT rate |
Up to £125000 | Zero |
The next £125,000 (the portion from £125,001 to £250,000) | 2% |
The next £675,000 (the portion from £250,001 to £925,000) | 5% |
The next £575,000 (the portion from £925,001 to £1.5 million) | 10% |
The remaining amount (the portion above £1.5 million) | 12% |
– If the UK property purchased is an extra residential property already owned elsewhere in the world, a 3% surcharge is added to the normal rate of SDLT. This additional 3% surcharge is waived if you are replacing your primary residence on the same day.
If you do not sell your prior primary residence on the same day you acquire your new UK property, you will be subject to an additional 3% SDLT charge, but in such a case, you have a tenure period of up to three years to sell your previous residence and reclaim the additional tax. Once the property is sold, you may reclaim the additional 3% SDLT payment. For the purposes of the additional 3% rate, the purchaser and their spouse or civil partner are classified as one person. Therefore, if your spouse has a residential property elsewhere in the world and purchasing a new residential property in the United Kingdom, you will be classified as a single entity, and the additional 3% SDLT tax will still apply.
– Since 1 April 2021, non-UK residents purchasing residential property in England and Northern Ireland have been subject to an additional 2% SDLT surcharge. This effectively means that if you are purchasing a house in the UK that will not be your primary residence (i.e. you are already the owner of another property), you need to pay the 2% non-UK resident surcharge on top of the 3% SDLT fee on additional residences.
– If you purchase a property from a company and the property’s value exceeds £500,000, a 15% SDLT flat rate will be applicable. You may be eligible for limited exemptions from the flat 15% SDLT rate, such as when the acquisition is made for letting purpose as part of a rental business or property trading or development business.
– SDLT is not payable if you purchase shares in a property holding company. However, there are some possible drawbacks of investing in a property holding company that you should discuss with your tax and legal counsel, not the least of which is ATED (Annual Tax on Enveloped Dwellings) Additionally, as of 6 April 2017, acquiring residential property in the United Kingdom through a company does not provide any protection from the inheritance tax.
– ATED is a yearly tax payable by companies that own residential property in the United Kingdom having a value of more than £500,000. Current ATED charges are –
Property value | Annual chargeege |
More than £500,000 – £1 million | £3,700 |
More than £1 million – £2 million | £7,500 |
More than £2 million up to £5 million | £25,300 |
More than £5 million up to £10 million | £59,100 |
More than £10 million up to £20 million | £118,600 |
More than £20 million | £237,400 |
ATED provides a number of exemptions, the most prevalent of which are –
CGT is due at a rate of 28% on any profits realised on the disposal of residential property by all UK residents and (as of 6 April 2015) non-UK residents. Gains on the disposal of your only or main residence by gift or sale are exempt from CGT under the Principal Private Residence Relief (PPR). Individuals are eligible for this benefit, but companies are not. If you are a non-UK tax resident, you may have difficulty claiming PPR because there are some conditions you need to fulfil in order to claim PPR –
From 27 October 2021, residents of the UK and non-residents of the UK who dispose of residential property in the UK must report and pay any CGT due within 60 days of the transaction’s completion.
– If a property is purchased for the purpose of renting it out, a 20% withholding tax is charged from the landlord’s gross annual rental revenue from the property. When the letting agent collects money from the tenant, this process is complete. To avoid paying this additional tax, the individual must register with HMRC under the Non-UK Resident Landlord Scheme and receive the gross rental revenue once registered. They would be required to file a self-assessment tax return each year and pay income tax on the net rental profit at a rate of 20%.
If you have questions regarding the tax implications for a foreigner buying UK property, contact us and we will put you through to our Tax Experts.
A new study calculated how eco-friendly our homes and lifestyles are in different UK cities to reveal the most ‘future forward’ places to live around the country
New research from the find-a-tradesperson platform, Rated People reveals the places in the UK with the most eco-friendly homes, and where residents have the most sustainable lifestyles.
Edinburgh takes the top spot overall for the UK’s most ‘future forward’ city, scoring highly for both eco-friendly homes and a sustainable lifestyle. Norwich is the top place in the UK with the most eco-friendly homes and Plymouth residents have the most environmentally friendly lifestyles in the country.
Future Forward
The findings are taken from this year’s Rated People Home Improvement Trends Report, where different UK cities were scored against a set of 34 ‘eco criteria’ ranging from how many residents now eat less meat, to how many homes have smart meters and electric car charging points – 20 of the measures relate to how eco-friendly our homes are, and the other 14 are connected to sustainable ways of living.
The top 10 most ‘future forward’ places in the UK (and each city’s ‘future forward’ score) are:
1 | Edinburgh | 50.5 |
2 | Plymouth | 50.2 |
3 | Norwich | 48.4 |
4 | Southampton | 48.2 |
5 | Cardiff | 47.5 |
6 | Nottingham | 47.1 |
7 | Belfast | 46.1 |
8 | Brighton | 45.7 |
9 | Glasgow | 45.3 |
10 | London | 45 |
Each city scored points according to the percentage of homes that had eco upgrades to increase their energy efficiency or how eco-friendly they are – from standard eco improvements like double glazing and extra insulation to less common additions like biomass boilers and wind turbines. Added to that, points were also on offer for the percentage of residents who said they do things like recycling, eating less meat and growing their own food.
In total, a maximum of 200 points were on offer, and Edinburgh, with a score of 50.5 overall, is the best place to live in the UK for an eco-friendly lifestyle and home.
The research also discovered that demand for eco-friendly home improvement jobs increased by a massive 41% in the run-up to 2021 and more than half (57%) of UK residents said they wanted to find ways to be more eco-friendly in the future. So, the report highlights the progress that’s already been made in the UK around living more sustainably, but it also shows there’s a strong appetite and lots of potential for more to be done – whether that’s making lifestyle changes or increasing the energy efficiency of our homes.
Eco-Friendly Homes
When looking specifically at how energy-efficient and eco-friendly our homes are, the research calculated how properties in the UK stacked up against the set of 20 ‘eco home criteria’ – ranging from how many homes have extra insulation, to how many homes have smart meters and electric car charging points.
The top 10 places in the UK with the most eco-friendly homes (and each city’s eco-home score) are:
1 | Norwich | 15.1 |
2 | Cardiff | 15 |
3 | Glasgow | 14.9 |
4 | Liverpool | 14.5 |
5 | Edinburgh | 14.5 |
6 | Nottingham | 14.2 |
7 | Southampton | 13.8 |
8 | Manchester | 13.8 |
9 | Belfast | 13.8 |
10 | Sheffield | 13.7 |
When looking at each city’s scores for eco-friendly homes, with a total of 100 points on offer, the individual scores may seem low – this is primarily because, alongside common measures like insulation and double glazing, the research also looked into how many homes have non-mainstream technologies, like heat pumps, biomass boilers and electric cars, which only a very small percentage of homes currently have.
Top Cities For Different Eco Home Upgrades
Homes in Glasgow are the most likely in the UK to be double glazed, with 72% of homes kitted out with this eco upgrade. Cardiff homes are top for extra insulation, with 38% having it installed – more than any other city. For smart meters, it’s Edinburgh, with 35% of homes having one, and for energy-efficient appliances, Sheffield comes out on top, with 21% of homes replacing older, less efficient models within the last five years.
When it comes to less common ways to increase a home’s energy efficiency, Newcastle is the city with the highest percentage of homes to have biomass boilers, with 5% of properties fitted with one. For electric cars, it’s Belfast, with 6% of homes having one on the drive, and for heat pumps, it’s Liverpool, with 5% of homes using the eco-friendly heating alternative.
Sustainable Lifestyles
Out of the 34 different eco measurements in total, 14 related to lifestyle, for example using less plastic, donating clothes instead of throwing them in the bin, or using eco-friendly cleaning products.
The top 10 UK cities where residents do the most to live sustainably (and each city’s eco-lifestyle score – out of a possible 100) are:
1 | Plymouth | 36.5 |
2 | Edinburgh | 36 |
3 | Southampton | 34.4 |
4 | Norwich | 33.3 |
5 | Nottingham | 32.9 |
6 | Brighton | 32.6 |
7 | Cardiff | 32.5 |
8 | Belfast | 32.3 |
9 | Bristol | 32 |
10 | London | 31.9 |
When looking at individual lifestyle factors, with almost half (46%) of Edinburgh’s residents saying they now eat less meat than they did before, the Scottish capital takes the top spot for decreasing the amount of meat in their diets.
Plymouth has reduced plastic use the most, with three quarters (75%) of residents saying they now use less plastic. More than half (52%) of Brighton residents say they buy second hand, making it the top city for sustainable shopping and Bristol is the top city when looking at how many people are part of a tree-planting initiative, with more than a fifth (22%) of residents saying they’re part of one.
Adrienne Minster, CEO at Rated People commented:
“We often hear about the need to be kind to the planet and make eco-friendly choices. As well as lifestyle changes, one of the biggest ways we can have a positive impact is by making sure our homes are as eco-friendly and energy-efficient as possible. That doesn’t mean we all need to build Grand Designs-style eco-homes though – there are lots of easy ways to increase your home’s eco-credentials without spending a fortune, like installing a smart meter, using smart heating controls or upgrading some of your appliances to more energy-efficient models when the time’s right.
Other energy-efficient home upgrades, like double glazing and extra insulation not only work to cut your carbon footprint, but they can also potentially shave thousands of pounds off your energy bill, so they’re great for the planet and good for your pocket!”
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