Over the past ten years London has attracted nearly $90bn in investment in commercial property landing it in first place for such investments worldwide. Such acquisitions include a Mayfair shop for more than £200 million.
London and more generally the United Kingdom has always offered superb investment opportunities for foreign property buyers. It is therefore important to appreciate the various taxes that could be levied against you:-
1) Inheritance Tax 2) Capital Gains Tax 3) Annual Tax for Enveloped Dwellings – a tax on companies that own properties used by their owners 4) Income Tax 5) Stamp Duty Land Tax
A competent property solicitor would be able to advise you on how to minimise these potential liabilities.
The two year wait that a lessee has had to endure to extend their residential lease has been removed from next Friday 31st January 2025 as section 27 of the Leasehold and Freehold Reform Act 2024 (removal of qualifying period before enfranchisement and extension claims) comes into force.
Solicitors in London have reported an increase in instructions from landlords, seeking to serve section 21 notices, and tenants, seeking to defend possession proceedings, as the Renters’ Rights Bill commences its way through parliament. The sight of the end of section 21 ‘no fault’ evictions had heralded this spark of litigation.
The Leasehold and Freehold Reform Act 2024 received Royal Assent last Friday the 24th May 2024.
It is an act to prohibit the grant or assignment of certain new long residential leases of houses, to amend the rights of tenants under long residential leases to acquire the freeholds of their houses, to extend the leases of their houses or flats, and to collectively enfranchise or manage the buildings containing their flats, to regulate the relationship between residential landlords and tenants, to regulate residential estate management, to regulate rent charges and to amend the Building Safety Act 2022 in connection with the remediation of building defects and the insolvency of persons who have repairing obligations relating to certain kinds of buildings.
Which parts are in force? This is determined by section 123 of the Act which provides:-
Commencement (1) This Part comes into force on the day on which this Act is passed. (2) The following provisions come into force at the end of the period of two months beginning with the day on which this Act is passed— (a) section 112 (regulation of remedies for rent charge arrears); (b) section 116 (recovery of legal costs etc through service charge); (c) section 117 (repeal of section 125 of the BSA 2022); (d) section 118 (higher-risk and relevant buildings: notifications in connection with insolvency). (3) The other provisions of this Act come into force on such day or days as the Secretary of State may by regulations appoint. (4) The Secretary of State may by regulations make transitional or saving provision in connection with the coming into force of any provision of this Act. (5) The power to make regulations under this section includes power to make different provision for different purposes.(6) Regulations under this section are to be made by statutory instrument.
Residential freeholders of leasehold properties are to escape certain criminal prosecutions if the Leasehold and Freehold Reform Bill that was introduced yesterday comes into force. All criminal sanctions will be removed in respect of service charge accounts format and supporting document inspection rights.
The fall in the number of construction contracts has been evidenced by a 25% insolvency increase in building firms since the pandemic.
Escalating inflation, delays in significant infrastructure projects, a drop in the construction of new homes and the cost increments of materials are the chief culprits here.
Flat sales in London are up nearly a quarter compared to pre-pandemic conditions and house sales are showing a smaller yet still significant increase. In prime central London renters are being forced to pay more as there are fewer deals on offer, with particular demand in up to two bed properties. Suburban rents have increased even more so.
New leases and renewals are being reported by some of the commercial property mega corporations with rents holding firm even though foot fall remains slightly subdued due to hybrid working. Recent builds especially are of interest.