The UK’s looming exit from the EU and the ending of permanent non-dom tax status by the Cameron government in 2015 has created a new phenomenon in the property called the uber tenant, it has been claimed.
Not a tenant who uses the mobile app to get around but, says a leading north London agent, the growing number of overseas residents who rent luxury property instead of buying them.
Agent Trevor Abrahamsohn of Glentree Estates (pictured, left) says fewer wealthy families are purchasing the sort of £20-£25 million mansions his company deals in and that, instead, they are renting them, often for over £100,000 a month.
“With Sterling being greatly devalued and the draconian banking regulations which apply to bringing wealth in to this country, some of our international friends find it easier to rent than to buy, which is markedly pushing up prices,” says Trevor.
Amit Soni (pictured, right), who runs Glentree’s rentals business, says this month his average rent for a property on his patch has been £40,000 a week, which he says is “unprecedented both for us and the locality”.
“By renting these mansions, they are able to live in the same luxury as if they had purchased them, with such exotic facilities as indoor swimming pools with seven-star spas, grandiose reception rooms, more bedrooms suites than in a luxury hotel and gardens that are reminiscent of a small country estate,” he says.
The maths of renting versus buying in the UK at the moment or overseas arrivals are stark. By renting they avoid Stamp Duty of £2.913 million on a £25 million freehold property and £3.67 million if bought through a company rather than as an individual.
Companies that own property in the UK – a common tactic used by overseas UK residents – also have to pay an Annual Tax on Enveloped Dwellings (ATED) on properties valued at more than £500,000 which Glentree estimates costs circa £160,000.
“In fact, saving these costs means that they can pay a higher rent which effectively, is free of charge thanks to the government’s obscene property buying taxes,” says Trevor.
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