It appears that the nontaxable London pied a terre favored by many international oligarchs may no longer be available for tax-free wealth accumulation: nonresidents will pay capital gains tax on their U.K. real estate capital gains.
That certainly seems to be a reasonable quid pro quo for the benefits nonresident property owners enjoy when they acquire property one of the world's more desirable real estate markets. The opportunity to park immense amounts of wealth where it will be protected by a highly stable and nonconfiscatory government is certainly worth the small price of paying tax on increases in value; the fact that it is pleasant and convenient to visit adds further value.
The law change is an indication that the U.K. has realized it has some pricing power. There just aren't too many suitable places for the hugely rich to buy hugely expensive property.
Will this development drive the U.K. real estate market down? Probably not. The United States has had a similar regime in place for decades. California's recent "millionaire tax" tax increase may also be instructive: California raised its tax on very large incomes without experiencing a notable exodus of either wealthy taxpayers or businesses. Extremely desirable places to live can, and should, price themselves in accordance with demand.
This is wonderful! I love the bit about hoping. That's the thing that really got me to make my final decision to sign with my agent; she had this amazing optimism just leaking out of her pores when she called to offer representation.
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