Britain’s Labour Party, which is predicted to lead the next government, plans to impose major constraints on foreign purchases of houses when they take power. According to an article in the Financial Times, Labour officials are devising policies such as higher stamp duty for foreign buyers as well as restrictions including a limit per development for new builds.
This could have a considerable effect here, especially for those in the Irish border counties who can presently buy property in either the Republic or Northern Ireland without any extra costs. Labour officials were not available to comment on Monday, a bank holiday in Britain, on whether their plans encompass an exemption for cross-border acquisitions here.
The move to restrict overseas property purchases in the UK occurs as Labour leader Keir Starmer is aiming to strengthen his party’s already strong lead in the opinion polls before the next general election. Similarly to Ireland, Britain has seen the growth of large-scale private rented sector (PRS) investment in recent years as well as the contentious purchase of luxury properties in London and other cities by wealthy international individuals and families that often are neither rented nor occupied.
Labour’s UK plan would establish temporary restrictions to target investment in particular developments and local authorities to provide first-time buyers with priority. Foreign buyers would not be allowed to acquire more than half of the homes in a new scheme. Additionally, a future Labour government would increase the additional stamp duty – presently at 2% – overseas buyers pay.
Several countries such as Singapore, Denmark, Canada, and Malta currently limit sales of housing to foreign residents in the same fashion that Labour are considering, but many property experts claim that banning investment could lead to fewer new homes being built. This is an argument that has been made by successive Fine Gael-led governments here against imposing substantial restrictions on cuckoo funds as foreign institutional investors have injected billions of euros into bulk purchases of thousands of apartments in Ireland in recent years.
