Changes to Stamp Duty Land Tax (SDLT) for Overseas Buyers

Introduction

Labour has announced plans to raise Stamp Duty Land Tax (SDLT) surcharges for overseas property buyers by 1%, bringing the surcharge to a total of 3%. This move is part of Labour’s broader efforts to address property market inequality and increase revenue from international investors. In this blog, we’ll explore what these changes mean for the property market and how they may impact overseas buyers.

1. Current SDLT Surcharges for Overseas Buyers

Overseas buyers are currently subject to an additional 2% SDLT surcharge when purchasing property in the UK. Labour’s proposal would increase this surcharge to 3%, aiming to raise more revenue and address property market inequality.

• Key Fact: SDLT surcharges are applied on top of regular Stamp Duty rates.

2. Impact on Overseas Property Investors

An increase in SDLT surcharges could deter some international buyers, especially those investing in high-value properties. However, the UK property market remains attractive for overseas investors due to its stability and long-term growth prospects.

• Key Impact: Higher costs for overseas investors and potential cooling of demand in the UK property market.

3. Addressing Property Market Inequality

Labour’s increase in SDLT surcharges is aimed at reducing the impact of overseas buyers on the UK property market, which can drive up property prices and make home ownership more difficult for UK residents.

• Key Benefit: The policy seeks to make housing more affordable for domestic buyers by reducing competition from overseas investors.

Conclusion

Labour’s plans to raise SDLT surcharges for overseas buyers are part of a broader effort to create a fairer property market. While this may reduce demand from international investors, it could also help address property market inequality and raise additional revenue for the government.