Investing In The UK - Dana Point Real Estate

Investing in UK property has long been the choice of foreign investors. UK real estate has done well for individuals who have invested from outside the country. This is especially true of London, where real estate values have skyrocketed in recent years. People wishing to set up home in the UK are aware of the high standard of living this country has to offer. However, with this standard also comes a high cost of living and substantial amounts of tax to be paid. In fact, taxes are probably the biggest obstacle to purchasing property in the United Kingdom. There are five taxes that should be taken into consideration before you make a decision to buy property in the UK.

The UK, unlike many countries, does not have restrictions when it comes to property ownership for foreign investors. This makes it easy for Americans to buy property in the UK. Real estate prices are high in most parts of the country and have risen substantially in the last few years. This is great news for people who already own homes but not such good news for new buyers who are now forced to pay premium prices for even modest homes. This should not dampen the enthusiasm of anyone wishing to relocate to the United Kingdom, but it is something that should be kept in mind. Fuel prices are a lot higher in the UK than they are in America and this can have an impact on your travel routes. If you are planning on working in the UK it may be a good idea to purchase a home that is an easy commute to work.

There are two taxes that are indirect taxes. Stamp duty is the tax that is put on property based on the purchase price. The percentages can vary between 1-4% and are dependent on the cost of the property. Home purchases that cost over half a million pounds are charged the 4% tax. Another indirect tax is known as a council tax. This is a tax that comes from local authorities. This rate also varies and depends on where in the country the property is bought. The purchase price and value of the property is also taken into consideration when levying this tax. These indirect taxes can be costly and definitely have to be thought about before making a purchase.

There are three direct taxes that homebuyers should be aware of. Income tax is charged to people who own homes in the UK as an investment vehicle. If the property gains enough value that you earn money on it, you are charged income tax accordingly. This tax only applies to investors and if you live in the home you bought, you need not be concerned about it. Another tax is the capital gains tax. This tax is applied if you make money by selling your UK property and are living in the UK. Non-residents who sell their property are exempt from this tax if the property is owned as an investment only.

The inheritance tax may apply to you if you have assets in the UK and are an investor. If you live outside the UK you may be able to get out of paying this tax. Consulting a lawyer or real estate advisor may prove beneficial. As a rule, most people living outside the UK need not consider this an issue. Living in the United Kingdom can be a rewarding experience and affords many benefits to residents. To find out more about obtaining financing for your UK purchase you may wish to visit Simply Finance.

Source: http://www.mydanapointrealestate.com/investing-in-the-uk/

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