Why Invest in UK Real Estate from the Middle East?
Investing in UK property from the Middle East can be the ideal way to diversify your assets with the addition of property.
Here at Joseph Mews, we’re able to provide a complete end-to-end service for purchasing a property investment, helping you secure your financial future.
With high demand for UK property both domestically and internationally, property prices across the country are expected to rise by 21.5% over the next four years.
This has created the ideal environment for a buy-to-let investment, especially with rising prices and low interest rates.
Featured Development
Lockside Wharf
Birmingham
Stunning Off-Plan Investment Opportunity
- Off-plan apartments – estimated completion 2023
- City-centre location just 3 minutes from Brindleyplace
- Unique waterfront living in Birmingham
- 24.5% price growth expected by 2026 (JLL)
- Top location for London leavers – forecasting yields above 5%
Prices From
£299,950
What do Middle East investors need to know about UK tax?
If you’re purchasing a property in the UK, you need to understand your tax liabilities, as well as how taxation works in both countries. This will allow you to structure your investment efficiently.
Tax in the UK is largely determined by a person’s residential status, so working this out first is important for international investors.
Stamp Duty Land Tax (SDLT) – This is a tax measured in bands that increases alongside property prices. Any additional property and/or overseas purchase can increase the SDLT you pay.
Capital Gains Tax (CGT) – This is paid whenever you ‘dispose’ of a property and is calculated by subtracting the sale value from the original purchase to find the total gain.
Non-Resident Landlord Scheme – Overseas buyers are required to enter the non-residential landlord scheme, which ensures they only pay income tax on rental profits in the UK, rather than the country they are based. This avoids double taxation.
Meet the MENA Team
Common FAQs for International Investors
Can international investors buy property in the UK?
UK property has long been a safe haven for overseas investors, and in recent months, the number of overseas landlords in the market has reached an all-time high.
According to research, there are around 184,000 international landlords with UK properties, which has increased 19% in the past five years alone.
While the process of purchasing UK property from overseas is generally a longer process and comes with more considerations, the returns often compensate for these. For overseas landlords purchasing additional property in the UK, a 3% charge will need to be paid.
This 3% will also be stacked with the 2% Stamp Duty Land Tax surcharge that applies to overseas investors.
Where to invest in buy-to-let in the UK?
Understanding where to invest in buy-to-let in the UK continues to be a tough decision for many investors, especially with so many potential locations in the country.
The best way to answer this question is to establish what you’re looking to achieve. Do you have short or long-term goals? Are you looking for capital growth or rental yields?
If you’re looking for more immediate rental returns, you’ll need a location with high yields and strong tenant demand.
On the other hand, if you’re investing for capital growth, you’ll want to identify areas that are regenerating and redeveloping the surroundings. This kind of activity often pushes property prices higher, which can deliver appreciation over time.
If you’re looking to find the best places to invest in the UK in 2022, why not check out our list here?
How many UK taxes are there?
In the UK, there are several taxes to consider. From Income Tax to Inheritance Tax and Capital Gains Tax, living – or investing – in the UK comes with a variety of different responsibilities.
For property investors, the key taxes to be aware of are: Income Tax, Stamp Duty Land Tax, Inheritance Tax and Capital Gains Tax. For those who have plans of staying in the market for a long period of time, it’s crucial to be prepared for every one of these taxes.
While Stamp Duty Land Tax will need to be paid when purchasing the property, any rental income will be subject to Income Tax. Additionally, Capital Gains Tax will need to be paid on the sale of the property and estates worth over £325,000 will be subject to Inheritance Tax.