Hong Kong's interest in UK properties remain strong
A residential project in East London generates enthusiastic response from buyers in the city
Hongkongers' interest in British properties has not diminished despite the increasing complexity of the country's taxation system.
Hamptons International, a British-based residential agent, said it had seen a good response to the sale of Lumire, a project in East London, during an exhibition last weekend.
"Thirteen units or 90 per cent of the units launched in Hong Kong last weekend were sold," said Richard Teoh, a sales director of Hamptons in Hong Kong.
"Prices ranged from £320,000 to £445,000. Most of the buyers are from Hong Kong."
Lumire is phase three of the Rathbone Market redevelopment scheme, which is part of a £3.7 billion regeneration project to turn Canning Town into a vibrant area in East London.
The 214-unit building comprises studios as well as one, two and three-bedroom flats, most of which have a balcony or terrace.
Teoh said none of the clients had asked about the revised tax system in Britain or cited it as a deterrent to buying a unit there.
The British government is making good on a promise to boost taxes for non-resident individuals who own properties in the country.
Since April 1, it has taxed non-residents on capital gains they make on British properties that are not their primary residence.
Katie Graves, a partner at Withers Hong Kong, said the key taxes that applied to British real estate included income tax, capital gains tax, annual tax on enveloped dwellings, stamp duty land tax and inheritance tax.
The annual tax on enveloped dwellings only applies to residential properties held by a non-natural person, such as a non-British company. Graves said it did not apply if the property was held in the investor's own name.
The charge currently applied to properties valued at more than £1 million, but it would apply to properties valued at more than £500,000 from April next year, Graves said.
Due to the complexity of the British tax system, Graves said a Hong Kong-based investor would need to engage a British conveyancing lawyer to manage the purchase of a property as soon as a suitable property was identified.