London mayor Sadiq Khan says he supports the seizure of property assets connected to the allies of Russian President Vladimir Putin.
The campaigning organisation Transparency International estimates that 100 London properties worth £1.1 billion are owned by Russians accused of corruption or links to the Kremlin.
It is thought by some that a lack of transparency over identifying the legal and beneficial ownership of companies and properties could be aiding offences such as tax evasion and money laundering, as well as hiding the assets of those who would come under any possible sanctions regime.
Khan has previously criticised what he describes as the government’s ‘failure’ to create a register of overseas property ownership, and now wants further measures to charge those who buy property in the UK with no intention of living here and leave them empty while London faces a housing crisis.
As well as a register of overseas ownership, Khan now demands:
– Seizure of property assets held by allies of President Putin;
– Raising the amount overseas owners have to pay for leaving their home empty by increasing the council tax ‘empty homes premium’;
– Raising capital gains tax on overseas buyers from 28 per cent to 40 per cent;
– Increasing the taxes paid by overseas companies investing in property by increasing the Annual Tax on Enveloped Dwellings.
Khan claims that these measures, if properly implemented, could raise up to £370m a year, which could then be used to fund more than 2,500 new council homes.
He says new policies would only apply to property owners who are resident overseas, not those who move to London and make the capital their home.
An established residency test, such as that introduced as part of the existing stamp duty surcharge on overseas buyers, could be used as the basis for these measures.
“For far too long ministers have turned a blind eye to the use of our capital’s homes as a safe harbour for oligarchs to park their cash, which is having a negative impact on both our international reputation and our local housing market. Now is the time to act” explains Kahn.
“London will always be open to foreign investment and the millions of people from around the world who choose to make our city home.
“But we must take proactive measures to insist on a greater contribution from overseas buyers, clamp down on those who look to exploit our openness, and use the money to invest in social and other low-cost homes for Londoners.”