Thursday, December 5, 2013

Capital Gains Tax on UK Properties

Cash strapped countries will resort to desperate measures. The UK is proposing capital gains tax on properties sold by non residents. When will the US follow suit.
Sky News television reported a month ago that the government is considering extending capital-gains tax to foreign investors. Treasury minister Sajid Javid indicated last month an announcement was likely when Chancellor of the Exchequer George Osborne makes his Autumn Statement to Parliament tomorrow.
Foreigners and out-of-town vistors, none of whom vote locally are a soft target.

From Comments
This happens in the US as well. In my state they re-wrote the real estate tax laws to put unoccupied (e.g. second homes) and rented homes in a different tax class than owner-occupied homes. Once this was done, smaller vacation communities (which have a high percentage of second homes) taxed the shit out of that classification while cutting the owner-occupied class a break; they were able to do this because the second home owners couldn't vote in local elections that passed the tax increases. Never underestimate how quickly your government and neighbors will fuck you over if there's something in it for them.
After all, what better way to "honeypot" and trap foreign capital than by making inbound cash transfers easy, and then once the real estate "reserve currency" has been acquired, to change taxes and force foreigners to pay up for the privilege of having been allowed to park their illegal capital there in the first place. 

In effect not much different from "Nationalization" in 70's of foreign owned estates and companies in Sri Lanka.


1 comment:

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