Real Estate Investor Magazine South Africa February 2015 | Page 58

UK PROPERTY

BY ROSEANNA MCNALLY

Good News for the

Average Investor

The UK is viewed as a safe bet for
South African property investors

A

s from the 4th December 2014 the rules for
calculation of Stamp Duty Land Tax (SDLT)
payable on the purchase of a residential
property in England and Wales have changed. This is
welcome news for South Africans looking to invest in
London and other parts of England and Wales.
Under the new rules SDLT is paid on a graduated
scale rather than a flat rate meaning there are significant
savings to be made. For example on a purchase at
£325,000 the SDLT was previously payable at a flat
rate of 3% totalling £9750, but under the new rules the
duty payable is reduced to £6,250, so a saving of £3500.
The table sets out the new rates.
Despite some pre-election concerns the UK is
viewed a safe bet for South African, and other, investors
with good rental yields and also undeniable long term
capital growth especially in London. Though emerging
markets in other countries may appear to yield higher
returns these are often far riskier compared with
investment in the UK.

“There are significant
savings to be made.”
Despite the threat of Capital Gains Tax the UK
has much to offer an overseas investor. The market
downturn in 2007 allowed investors to buy well-priced
residential and commercial properties with solid rental
potential and long term capital growth. The main
taxation threats for overseas buyers relate to high value
properties – those buying units below £500,000 have
less to worry about.
58

February 2015 SA Real Estate Investor

Purchase price bands (£)

Percentage rate (%)

Up to 125,000

0

Above 125,000 and up to 250,000

2

Above 250,000 and up to 925,000

5

Above 925,000 and up to 1,500,000 10
Above 1,500,000+

12

RESOURCES
Bartons Solicitors
www.reimag.co.za