LONDON (Reuters) - Britain will impose capital gains tax on foreign investors selling homes that are not their primary residence, Finance Minister George Osborne said on Thursday, as the government moved to curb soaring house prices in London.
"It's not right that those who live in this country pay capital gains tax when they sell a home that is not their primary residence - while those who don't live here do not," Mr Osborne said in a twice-yearly budget statement to Parliament.
"That is unfair. From April 2015, we will introduce capital gains tax on future gains made by non-residents who sell residential property here in the UK."
Property prices in London have jumped by about 10 per cent in the last 12 months and increases in some parts of the capital have been greater.
Much of the demand has come from foreigners looking to buy their second home or wanting to tie up their cash in London, which has been seen as a safe haven in recent years amid economic and political turmoil in Europe and the Middle East.
Britain's Deputy Prime Minister Nick Clegg said last month the government was considering the change to end the exemption from capital gains tax for foreign property investors.
Britons pay capital gains tax - typically at 28 per cent - on any profit from selling property that is not considered their primary residence.