Sabi Star

If you're asking me about the gain I made on the Dubai property sale of a few weeks ago about making a profit on the sale in Sterling terms - I have not as yet dealt with the UK tax on it as will do it after 5th April. I actually changed the AED to US$ but understand I shall have to pay UK tax on the profit as the conversion (to Sterling) would have been on the date of sale. The rate of capital gains tax is according to your level of Income and can be 18% or 28% and you can deduct your expenses - which in my case would be my buying costs. I also included some furniture in the sale and may be able to deduct the ''value'' of that but it wasn't much. I am not a tax expert -who can be very expensive! Also I actually made a smallish profit ( not a loss) in AED as well as Sterling - I was lucky 2 sets of estate agents annoyed me and I withdrew the property for a few months because of them - which brought the sale in line with the Sterling drop ( although I did not do this conversion)!

Sabi Star

I should have added if I had sold when Sterling was higher I would be paying a lower tax bill - so really it was not ''lucky'' I delayed the sale.

kostik3000

Osborn tax doesn't apply if property in U.K. is bought via limited company. Many landlords are moving towards Limited companies.

Johnnyboy11

You'll still have to pay a raft of taxes and fees:

Survey, valuation and conveyancing fees
Stamp duty, including the 3% extra stamp duty
Corporation, Dividend and Capital Gains Taxes
Company reporting and accounts
Council Tax (big increases on the way)

And of course, you still have to find a lender willing to give a competitive mortgage deal to an expat buying a UK property through a Company. Good luck with that.

If you want investment exposure in UK property, why not buy shares, funds or bonds specialising in the sector? Minimal upfront costs (0.5% stamp duty) and a lot less hassle to buy and dispose of.

Osborne has killed the BTL market in the UK for new entrants, particularly for expats.

Taz786

Would it be possible to purchase a property not as BTL but inform them that I am using it as a holiday home when I visit.

Whether I change my mind post purchasing and renting is a possibility but don't need to mention it.

Is the above feasible?

kostik3000

Not really. First of all, you would still have to pay extra 3% for Stamp Duty for holiday home and secondly you cannot rent without written bank approval. If they find out they will ask for immediate mortgage redemption and may be apply some fine too.

Sabi Star

As I understand it - if you buy a UK property and even if you do not happen to rent it for various reasons but fail to nominate it to HMRC as your main residence within the first 2 years you owned it and also own other residential property/properties at the same time, which you then sold, paying CGT on them - you would still have to pay CGT on sale of the main UK property because you have had the other properties. I don't know what tax applies if it is in a company name.

Maxima

Water disconnections final straw for community in Ras Al Khaimah who plan to take developer to court | The National


Yes, its not Dubai, rather RAK, and more of an outlier...


But it proves a case of how much control a developer has over property owners ...


A developer can ask an owner to pay tens of thousands of dirhams as "upgrade fees", without any documentation as to who is going to asking for or going to receive the amount, and if you do not agree, you wont be able to paint your walls, nor will you be able to get the title deed or sell, because you wont get an NOC, which you need to do anything.

IKnowNothing

I read that and thought the same, just another reason NOT to buy here.

Meow

Very few lenders will allow mortgages on holiday homes. I can be done in some cases but it is tricky. You won't get a UK residential rate either.

Taz786

Hi All,

After reading to peoples views on this thread, it's put me off investing in property in the region.

I understand Osborne's changes has made BTL not as attractive as before. And buying a second home as a holiday home has surplus charges. What about investing in a UK property and if its your first home. Would that make sense? Would I be able to apply for first time buyer benefits which is available. Do you feel these benefits will improve over the next few years?

Thanks

Sabi Star

You would need to pick where you bought carefully as some areas are stagnating which were growing in value previously, like parts of Central London while others have potential for price growth e.g. Luton increased because it is close to work in London, lower prices etc (but no one really wants to live there at the moment).

dominoman

Now's a better time to buy in the UK than it has been for a few years (for a non UK buyer). Pound is cheap and the market is slow, so much better chance of being able to push for a good deal.

Regardless of what the papers and the stats say, London property is really slow right now. People are just not buying. And I don't just mean Zone 1 (though that's by far the worst), but also out in 3/4 or even Croydon and beyond.

A friend of mine is looking to buy and every place he sees the agents call and call, basically begging him to put an offer in, even a cheeky one. It's a far cry from 3 years ago when agents had all the power and just smirked as buyers got gazumped and scrapped over dross.

I'd much rather buy in a falling market than a booming one. Less pressure and better bargains.

kostik3000

Yes, I agree with most of it but there are still a lot of buyers indeed. I am selling my BTL flat in Barking (Zone 4) and had about 8 offers so far in two weeks it's been on the market, it's still a bit low - £5,000 below of what I want and agent confident we can achieve the figure I want. If I settle for a bit lower figure, it would be sold within first week being on the market.

I agree, market has now turned towards buyers and not sellers but not that much...

kostik3000

Tax changes made by Osborne could be scrapped as yearly as this year as even very prominent national newspapers are now mentioning this as unfair practice and warning it might increase rents.

There are plenty of bargains to be made in UK, especially if you cash buyers. Some properties in Zone 2 and 3 are cheaper but good £50,000-£70,000 from their pick a year ago. And they will rent for you good.