Brexit Tax Changes And How They Will Impact Property Investing

brexit tax changes, how brexit affects property investing, effects of brexit


When the referendum to leave the EU went through, almost every single property investor in the UK was on pins and needles as they waited with baited breath to see what that would do to the market – and with good reason. The outlook was rather bleak. But months down the line, the Brexit process has begun and thankfully the property market has stabilised.

This is perhaps best illustrated by the fact that the investors of 22 Bishopsgate decided to proceed with the development of the 1.4m sq ft skyscraper despite there being speculations that the project would be abandoned. That shows you just how optimistic the market outlook is at the moment.

That, however, does not mean that there aren’t any changes that should concern you as far as property investing is concerned. Of course, in an effort to stabilise the country’s economy, there are going to be some changes; mostly tax based. Here are a few that you should probably keep an eye on from now.

What will happen to the pound?

Investment Gurus will tell you that the very first thing you need to look at when considering something as widely impactful on the economy as the Brexit referendum is to look at what it will do to your local currency. This, by far, determines what happens to almost every other sector of investment. As things stand today, the pound is down by a few percentage points, about 17pc against the dollar.

But that is not necessarily because of Brexit. Before the referendum, the value of the pound had skyrocketed to a point where market experts had predicted that it would soon be unsustainable and that a market correction was imminent. The fact that the pound has moved down, albeit slightly, in value means that you would have to spend more if you are looking at foreign property investments.

What about the bank rates?

Although it is expected to remain at 0.25pc for the rest of 2017, there is a very distinct possibility that these rates will rise. This particular rate keeps the British pound low when compared to other foreign currencies such as the USD. Especially since America has increased its central rate.

What is the general outlook?

Experts say that the UK’s economy has performed tremendously since Brexit. It is has done better than was expected. For that, you can expect your property investments to remain at par or at the very least, correct soon. What is of great concern, however, is what the entire process of leaving the EU and negotiating new deals will do to the property market.

This can only be seen a few years from now as the outcome as well as tax changes deemed necessary will play a big part in just how much foreign property investors come into the local market as well as how much local UK investors pour out into the foreign property market. In all honesty, it remains to be seen.

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