購買倫敦房產
1. What are the legal requirements for foreigners buying property in London? Can a corporate entity be used for the purchase and aid with inheritance/estate duty matters?
Foreigners interested in purchasing residential property in London should be aware of the legal requirements. While using a corporate entity, such as a Special Purpose Vehicle (SPV), is an option, it can involve significant costs and may limit mortgage options. Additionally, transferring property ownership through gifting or holding properties in children's names can address inheritance and estate duty concerns, but the seven-year rule for inheritance tax should be considered. Under this rule, the tax percentage varies based on the number of years between the gift and death.
2. Can you explain if and how the stamp duty and land tax applies to non-UK residents?
In the context of Stamp Duty Land Tax (SDLT) in the United Kingdom, it's important to note that individuals who have not spent a minimum of 183 days (equivalent to 6 months) within the UK during the 12-month period prior to their property purchase are considered "non-UK residents" for SDLT purposes. As a result, a surcharge of 2% typically applies when acquiring residential properties.
However, it's worth mentioning that this surcharge can be refunded if the individual later becomes a resident of the UK. The refund becomes applicable once the residency status changes.
Apart from this 2% surcharge, all taxes applied to overseas buyers are the same as those for local residents when purchasing buy-to-let properties. You can calculate the SDLT using the following website: Stamp Duty Land Tax Calculator.
3. What kind of property yields can I expect in various London bouroughs ?
In the current Central London rental market, the average rent has reached record highs, and the Financial Times predicts a significant growth of 23.3% over the next five years. Considering these market dynamics, it is considered highly favorable to achieve a gross yield of 5-6% and a net yield of approximately 4% in rental properties within our selected project in prime location.
4. What is the timeline typically like for purchasing a property in London from start to finish?
The timeline for purchasing a property in London can vary depending on various factors. For a completed project without the need for a mortgage, the process can be relatively quick. After reserving a unit, the exchange of contracts typically takes place within two weeks, and the entire transaction can be completed within one month.
However, if a mortgage is required, the timeline may extend to around three months. This duration is due to the additional steps involved in the mortgage application process, including the assessment of financial eligibility and property valuation.