Kersten Muller, real estate partner at Grant Thornton UK LLP, said:
“This announcement on capital gains tax for non-UK resident investors selling residential property was not unexpected and in fact has been talked about for the last few weeks. The introduction in April 2015 should give plenty of time for adjustments so it should not have an immediate effect on the property market. Also, any changes will be subject to a consultation.
“It is important to bear in mind that this is not just a tax on rich foreign investors but will hit all non-residents including people who retire abroad and keep their UK property to rent it out.
“What will be interesting to see is how this tax will be enforced and the money collected? In the US, which has a similar system in place already, it’s the purchaser who has to pay part of the purchase price to the tax authorities and then the vendor has to reclaim if appropriate. Is that how the Government sees it working here?
“So it will create a level playing field between UK and overseas investors, but there is a risk that any changes will create more of an administrative burden for the Government with little additional tax being raised.
“It is also worth bearing in mind that by trying to make it more difficult for overseas investors to invest into UK property we are potentially jeopardising the significant other economic benefits they bring when investing in UK real estate, which should not be underestimated.”