It appears the possibility of a London housing bubble has been ratcheted down a few notches recently by the announcement of chancellor George Osborne. He has made a change in the tax inheritance incentive plan which has been benefitting foreign investors of London property. Foreign owners of property are now unable to take advantage of their last remaining tax advantage which they had over British owners.

Property owners primarily set in Westminster, Kensington, and Chelsea will be affected. Beginning April 2017, property owners will be held accountable for all taxes on properties held and not be privy to an exception. They will be held to the same set of rules governing British property owners. Foreign investors owning property through an offshore company will be affected the most.

Osborne commented on the new rules applied to foreign investors, saying: “It is not fair that non-doms with residential property here in the UK can put it in an offshore company and avoid inheritance tax.”

Osborne added: “From now on they will pay the same tax as everyone else.”

Many property experts agree that the move simply brings the same tax advantages to the UK which are already found in places like the US.

By owning a property through an offshore company, owners were able to pass the property to another at the time of their death without an inheritance tax. This will no longer be possible.

Osborne brought higher stamp duty rates to owners in 2012 for dwellings enveloped as a way to crack down on non-payment of stamp duty. Some advisors see this as frustrating to those who had paid for the annual tax on enveloped dwellings, or ATED, during the past three years. Many investors have paid taxes during the past three years totaling thousands of pounds.