The UK is considering introducing an additional tax on non-residents who own high-value residential property in the country, according to the Financial Times.
This involves a potential surcharge on the already approved luxury home tax, which is set to take effect in April 2028. The new levy will apply to properties valued at £2 million or more. The UK Treasury refers to the proposed additional measure as the “oligarch tax” or the “non-resident surcharge.”
Under the basic scale of the new tax, owners of homes valued between £2 million and £2.5 million will pay an additional £2,500 annually. For properties valued at up to £3.5 million, the levy will be £3,500; for those up to £5 million, £5,000; and for properties valued at over £5 million, £7,500 per year.
Initially, authorities estimated that the new tax on luxury housing would generate approximately £430 million annually for the budget. However, the introduction of an additional surcharge for non-residents could increase revenue. According to The Times, foreign and international owners may account for 25–35% of the approximately 165,000 properties that could potentially be subject to the new levy.
British authorities link the initiative not only to the need to replenish the budget but also to an attempt to ease pressure on the housing market, particularly in London. The Treasury is examining the extent to which demand from foreign buyers affects property prices and housing affordability for British households.
The new tax is officially called the High Value Council Tax Surcharge. It will apply to residential properties in England valued at £2 million or more. The Valuation Office Agency will be responsible for assessing the properties, and the surcharge itself will be collected alongside council tax but will go to the central budget.
The British luxury real estate market has traditionally remained one of the key sectors for international investors. The highest concentration of high-end housing is found in London and the southeast of England. Market experts warn that the new tax could increase pressure on the segment of properties valued at around £2 million, as sellers and buyers will seek to avoid falling into the new tax bracket.
Luxury housing in the capital of the Philippines, the most populous city in the world, Manila, rose by 26.3% in 2023 – the highest among the 100 global markets monitored by Knight Frank, writes Mansion Global, citing the company’s report.
The second place in terms of growth was taken by the leader of the previous rating – Dubai, where the cost of luxury residential real estate increased by 16%.
The Bahamas took the third place with a 15% increase, while the fourth and fifth places were shared by the Portuguese Algarve region and South Africa’s Cape Town (+12.3%).
Global luxury housing prices grew by 3.1% last year, while 80 out of 100 monitored markets avoided recession.
Among the world’s regions, the best result was shown by Asia-Pacific, where luxury real estate rose by 3.8%. In North, South and Central America, growth was 3.6%.
The results of 2023 were significantly better than the forecasts of economists at the beginning of the year, said Kate Everett-Allen, head of international residential real estate research at Knight Frank, in the report.
