Tax / News / Financial planning

UK property and tax – market slowdown or opportunity?

For those who buy, own, sell or inherit UK property then there are a host of important tax factors to be aware of. Peter Webb, our Head of Tax Advisory, shares an update of the UK property market and explores some of the tax implications to be aware of if you own or invest in UK property.

The UK property market continues to enjoy healthy growth. In fact, UK property prices have rocketed, hitting record levels which are 79% higher than in 2009. The surge in prices has been seen across most types of homes, but some of the largest gains have been reached when houses have been converted into flats.

Against this backdrop is the inevitable concern that UK property may feel unaffordable, but interest in UK property remains very high as demonstrated by 35% of our recent webinar attendee’s sharing that they would consider purchasing a UK property within the next 12 months. This is in no small part due to the cost of borrowing, which has reduced, coupled with long-term mortgages which offer more scope to homebuyers and investors. And importantly, 35% of UK homes are owned outright meaning that a good chunk of the market isn’t affected by interest rates, and the rises which are predicted there. A final consideration is the rate of unemployment – with low rates more people are in the position to buy. These factors have all combined to create something of a sellers’ market, helping house prices to remain competitive.

Our latest webinar explored the state of the UK property market and the tax implications to consider when owning or investing in property. Huw Wedlock, Director of our Singapore Office, Tristan Davies, Director at SPF Private Clients and myself took some time to discuss some of the key financial considerations when buying and letting out property in the UK – for both UK residents and those living overseas.

Missed the webinar?

Watch it here

UK property tax and market update

As well as sharing the latest rates, fees and mechanics of buy-to-let mortgages, some of the key tax considerations when buying UK property were explored including issues about letting a property. For example, until a few years ago, it was possible for non-domiciles to save Inheritance Tax by holding UK property in an offshore company, but new rules mean it’s no longer possible to do so.

One other area of speculation is whether HMRC will introduce new tax charges for those investing in UK property. Although it’s unlikely that we’ll see immediate action it’s hard not to predict significant changes in the next couple of years. As with so many areas of finance at the moment, it will be important to keep a close eye on the situation.

To discuss any aspect of your UK tax situation please contact your nearest office.