15/08/23

UK: Research shows £40bn of property owned by offshore tax haven firms

As published on: mortagagestrategy.co.uk, Tuesday 15 August, 2023.

UK property with a market value of £39.8bn is held by overseas companies not subject to domestic tax laws.

The data from Stripe Property Group also shows that firms based out of the British Virgin Islands hold £13.23bn of the housing stock alone.

Stripe Property Group, analysed the number and value of properties across England and Wales owned by companies registered in overseas tax havens, as well as how the situation has changed in the past year.

The research shows that some 80,460 homes across England and Wales are registered to companies located in offshore tax havens.

While companies in the British Virgin Islands have gobbled up some of the most valuable stock, by volume Jersey is the biggest hotspot.

Some 21,602 properties are owned through companies registered in Jersey, surpassing the British Virgin Island total of 20,777.

The next five biggest tax havens that own property in England and Wales, both by value and volume, are Guernsey (£5.5bn and 12,877), the Isle of Man (£4.49bn and 10,393), Luxembourg (£1.07bn and 2,446), Singapore (£908m and 2,030), and Hong Kong (£851m and 1.632) – highlighting the scale of overseas ownership of the nation’s limited housing stock.

In terms of tax havens where companies are freshly buying up property, the Cayman Islands tops the list.

The number of properties owned by companies registered to the Caribbean-based British Overseas Territory has increased by 66 between August 2022 and August 2023, a jump of 4.8%.

In second place comes Ireland, with 4.4% more homes, followed by France, with a 4.2% increase.

At the other end of the spectrum overseas ownership has fallen amongst companies in Bermuda by 19.5%, while there were major falls in Luxembourg and Malta, at 10.5% and 9.7% respectively.

Stripe Property Group managing director James Forrester, comments on the latest findings:“The government has failed in its remit of building enough homes to address the housing crisis and as a result, many potential buyers have seen their aspirations of homeownership pushed far out of reach due to record rates of house price growth in recent years.

“So they can be forgiven for feeling a tad aggrieved at the fact that there is a substantial level of homes owned by offshore companies located in tax havens.

He adds: “Despite being located halfway round the world and not subject to domestic tax laws, companies in the British Virgin Islands own housing stock worth a staggering £13.23 bn.

“While such practices are ‘legal’ under the letter of the law, you would think that the provision of housing stock for the domestic population would be the government’s first priority and they would curb the ability for such practices to take place”.

Forrester concludes: “In tough economic times such as these, they should at least make sure those who own property remotely pay their fair share to ensure they’re on an even playing field with domestic buyers, while also contributing to the tax coffers.”

Tags

Offshore Tax UK Real Estate