Mr Walford-Fitzgerald adds: “For wealthy buyers who snap up UK property just to hold as a rapidly appreciating investment, the measure is likely to be an annoyance that will come off the bottom line rather than persuade them to let properties they see primarily as an asset rather than a home.”
However, the capital gains tax avoidance technique of using a company that holds UK property instead of selling the property itself looks set to be shut down from April 2019 as part of Mr Hammond’s tax crack down, which could affect professional landlords who have looked to mitigate higher tax through putting properties within a portfolio company.
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Within the volumes of documents accompanying the Budget announcement were several other measures, not least the moves to increase taxes for non-UK residents when they sell UK property.
Mr Hodges explains: "However, one of the more far-reaching changes is the extension of the taxation of disposals of UK property by non-UK residents to all gains on the disposal of interests in UK land and buildings."
At present the tax charge on non-residents is restricted to residential property only.
"While Budget day sees the launch of a consultation process, the key planks are fixed," says Mr Hodges. "The new rules will come into effect from April 2019 and will apply for both capital gains tax and corporation tax purposes.
"The foreign ownership of residential property has been a matter of some controversy, especially in the London property market.
"Therefore, this is a significant – and somewhat unexpected – change, and only time will tell what impact it will have on the appetite for foreign investment in UK real estate."
The chancellor also delayed the introduction of the 30-day time limit for the payment of capital gains arising on the disposal of a residential property until April 2020.
Simoney Kyriakou is content plus editor for FTAdviser
