Homeowners are repatriating millions of pounds of equity from second properties in Europe to take advantage of the strong euro, the government’s recent capital-gains tax changes, and to protect themselves from the global credit crunch. Sunday Times
Brokers report a 40% jump since September in the number of people re-mortgaging second homes to raise cash which they can set against their UK properties. This will help them to get a better deal in Britain as lenders tighten their criteria.
There has also been a surge in selling as homeowners seek to cash in on the 18% rise in the euro against the pound, which means a €200,000 property sold for £136,000 a year ago would now fetch £160,000.
The government’s CGT changes have exacerbated the trend since April 6, profits from the sale of a second home are taxed at 18% compared with a minimum of 24% for higher-rate taxpayers before. This applies to overseas as well as UK properties though there may also be tax due in the foreign country.