MARKET WATCH
Time to tax the influx of wealthy foreigners
Vince Cable's fabled mansion tax on houses above £2 million is not that onerous at a time when British taxpayers are being hammered
International millionaires have to live somewhere and a great many of them, it would seem, prefer to live a fair distance away from wherever they made their fortune.
London is the perennial safe port in a storm, and so it remains, in spite of the hysterical nonsense about taxes driving away wealthy non-doms.
As Athens burns, rich Greeks are baling out fast and buying £2 million plus homes in prime Central London. They join the Italians, who have made Pimlico an investment enclave over the past 12 months.
Germans and other eurozone buyers have been strong as well, along with Russians, Indians, Chinese and millionaires from a dozen other countries.
I once asked a billionaire in Beijing why he lived in Oxfordshire and the answer was that ours is one of the few governments in the world that operates within the rule of law and can't help itself to your money. France and the US were too arbitrary in that regard, or too inquisitive.
With sterling so cheap, it is unsurprising that there has been a flurry of sales activity, and foreigners now account for 56 per cent of sales above £2 million according to Knight Frank.
Yet do the British get enough out of these wealthy newcomers to their society? Is it reasonable, for example, that so many avoid stamp duty by buying their homes through offshore companies?
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Vince Cable thought ending this loophole would bring in £750 million a year. And his fabled mansion tax on houses above £2 million is not that onerous at a time when British taxpayers are being hammered.
'With the double win of low interest rates and a cheap pound, foreign investors have been having a field day acquiring trophy assets across Kensington and Mayfair,' says James Moss, of Curzon Investment Property.
'It shows the resilience of residential property as an asset class: 11 per cent annual total returns last year, representing a three-fold outperformance of the commercial property market.'
The trouble with these boasts from high-end estate age nts about how well they and their clients are doing is that they make the case for a little taxation overwhelming.
The price of a port in a storm needs to go up.
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