Investing in UK property as a non-resident

The UK property market is vast; it varies in terms of prices, locations, and property types, making it essential for investors to do their research before choosing a property. There are significant differences when investing as a non-resident and as a?resident in the UK. Here are several critical areas where non-resident investors are encouraged to conduct further research:

• Stamp Duty Land Tax (SDLT)

The SDLT varies by property price and residency status (owner-occupier, investor, non-resident), with additional surcharges for second properties and non-residents.?The multiple dwelling relief which provides tax relief for multiple purchases from the same vendor, is no longer available as of 1st June. Approximately a 2% surcharge will be applied.

• Legal Fees:

Legal fees would cover conveyancing, search fees, ID checks, land registry fees, and more. The criteria regarding who can certify documents may differ from one country to another here. Note that buying property doesn’t grant UK residency or citizenship.

• Mortgage and Tax Costs

Non-residents are eligible for UK mortgages, but they should also be prepared for the higher interest rates and larger deposits. Income tax on rental income and corporation tax for company purchases are also considerations.

• Taxes:

Income tax is payable on rental income, with rates depending on total income and residency status. Corporate tax is applicable if property is purchased through a limited company, with finance costs being deductible. The amount paid as tax will differ based on your income and eligibility for personal allowances.

• Legal Requirements

Purchasing UK property involves specific legal requirements, including notarised copies of ID and proof of address, evidence of the source of funds, and compliance with the Non-Resident Landlord Scheme for tax purposes.

As an overseas investor, buying off-plan properties can simplify the buying process and offer several benefits. It?often requires fixed reservation fee and staggered payments, reducing upfront costs. These legally binding dates means the developer has a duty to complete the project on time, offering peace of mind to investors.

Similarly, Assisted Living properties can be a great option for overseas investors as the nature of the investment means it’s completely hands off. The housing association takes care of the tenant, bills, maintenance and any other costs. These are predominantly cash purchases so if you are looking to transfer a larger amount of money into UK property with an assured high net rental return, this is an option to consider.

Investing in UK property is a strategic move given the country’s strong market fundamentals, growing population, and robust economy. Whether you’re looking for rental income, capital appreciation, or a secure investment, the UK property market offers compelling opportunities.

For a complete guide to investing in UK?property as a non-resident, click here .

This is not financial or tax advice, please speak to a professional before making any investment decisions.