Foreigners should not be targeted in tax grab

In response to Theresa May’s plan to tax foreign homebuyers, our Head of Research Sam Dumitriu commented:

“Taxing foreign homebuyers won’t make housing more affordable, only building more homes will do that. ‘Buy to Leave’ is a myth – just 1% of new homes bought by foreigners are left empty – when foreigners buy property they either rent it out or live in it themselves.

“May plans to use the revenue to fund anti-homelessness schemes, but her plan will backfire as it means fewer homes will get built, pushing up rents. Advance sales to overseas investors enable developers to build affordable housing and market-rate homes faster. LSE research for the Greater London Authority (GLA) found that recent growth in the ‘Build to Rent’ sector was driven by overseas buyers.

“When rents rise, so does homelessness. Trying to prevent homelessness by taxing foreign investment is like trying to prevent crime by taxing burglar alarms."

If you would like further comment or to arrange an interview, please contact Matt Kilcoyne on 07584778207 or email matt@adamsmith.org