British Labour Party plans to restrict foreign property investment

Labour leader Keir Starmer. Photo: Gareth Fuller/PA Wire© PA

Donal O'Donovan

Britain’s Labour Party, which is heavily tipped to lead the country’s next government, plans to impose significant barriers to foreigners buying homes when it takes power.

Policies including higher stamp duty for foreign buyers and restrictions including a cap per development around the sale of new builds are being drawn up by party officials. according to a report in the Financial Times.

Any such moves could have significant implications here, especially for home buyers in the border counties of Ireland, who at the moment can opt to buy property in either the Republic or Northern Ireland without penalties.

Labour officials could not be reached on Monday, a bank holiday in Britain, to clarify whether the plans include an exemption for cross- border purchases here.

They wi ll also be watched by policy makers here where voters locked out of home ownership and into a precarious and limited rental market are a growing demographic and potentially key electoral constituency.

The move to restrict foreign property purchases in the UK comes as Labour party leader Keir Starmer is looking to cement his party’s already commanding lead in the opinion polls ahead of a general election next year.

Britain, like Ireland, has seen the growth of large- scale private rented sector (PRS) investment in recent years as well as the controversial purchase of trophy properties in London and other centres by wealthy overseas individuals and families that in many cases are neither rented nor occupied by the owners.

The Labour UK plan would impose time- limited restrictions to target investment in particular developments and local authority areas in order to give priority to first- time buyers, the Labour officials told the Financial Times.

Foreign buyers would not be able to purchase more than half the home in a new scheme.

In addition, a future Labour government would also increase the additional stamp duty – currently at 2pc – overseas buyers pay.

Countries including Singapore, Denmark, Canada and Malta currently restrict sales of homes to overseas residents along the lines being examined by the Labour Party, but many property market experts say blocking investment ultimately risks fewer new homes being built.

That ha s been the key argument made by successive Fine Gael- led governments here against imposing major restrictions on so-called cuckoo funds as foreign institutional investors poured billions of euros into bulk purchases of thousands of apartments in Ireland in recent years.

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