Non-UK residents who wish to purchase a property in England and Northern Ireland will now have to pay a 2% stamp duty surcharge. 

The surcharge, which was introduced yesterday, applies to all residential property acquisitions and on rents on the grant of a new lease.

In addition, some UK resident firms that are controlled by non-UK residents will be liable.

Government guidelines state that individual buyers will be able to have the surcharge refunded if they are present in the UK for at least 183 days during any continuous 365-day period within two years referenced by the date of transaction.

Mark Hayward, chief policy adviser at Propertymark, commented: “This is a significant change because for the first time in England and Northern Ireland, UK and non-UK purchasers are treated differently. Agents need to ensure they understand the rules and make buyers aware.”

Despite the introduction of the additional stamp duty surcharge for foreign buyers yesterday, Jackson-Stops expects the housing market, especially in prime central London, to remain attractive to prospective for international buyers.

Harry Buchanan, director at Jackson-Stops, said: “We anticipate many more overseas buyers will return to the market once international travel restrictions are lifted. We therefore expect demand to remain strong going forward, especially as the UK continues to roll out one of the world’s fastest vaccination programmes, which will boost economic activity in the coming months.

“We are already starting to see pent up demand from overseas buyers starting to build. Over the past two months, numbers of buyers visiting our website from the UAE have increased by 31%, while website searches from Hong Kong have gone up 33%.

“In particular, more buyers from Hong Kong are getting in touch following the UK’s offer of an easier path to citizenship for Hongkongers with British National (Overseas) passports. These buyers are specifically looking to become owner occupiers, and are particularly keen to be close to good schooling.

“The increasing demand we are seeing gives us a strong indication that interest in prime central London will continue to be high, especially for turn key properties that can double up as a lock and leave which we know tend to be most sought after by foreign buyers, as well as properties close to transport hubs.”