Estate agents flag up exodus by non-doms

The capital's most upmarket agents, polled by the Evening Standard, said they have been approached by large numbers of people either putting their homes on the market or testing the waters in anticipation of the Chancellor's new rules.
They warned the number of new properties coming on to the market, and a shortage of weatlhy foreigners looking to buy, could add to downward pressure on house prices in central London.

Alistair Darling plans to levy a £30,000 charge on non-doms who currently pay no UK tax on their earnings outside Britain and have been here seven years.

Critics claim the move will drive wealthy foreigners abroad and have urged the Chancellor to reconsider before the Budget next week.

£60,000-a-year bill is 'the last straw'

"People are turning off the lights and shipping out of the country," said Wetherell boss Peter Wetherell, who sells some of the most expensive homes in Mayfair.

James Bailey of Douglas & Gordon in Kensington said: "There is a huge amount of uncertainty and nervousness over the non-dom issue. We have had several people recently very worried about the situation who are seriously thinking about packing up and going.

"Naturally what happens when you have more property coming onto the market is prices start to come down. It also means that we are going to have a more restriced market place because there will be less buyers out there looking to purchase. It is very worrying."

Jonathan Hewlett of Savills on Sloane Street said his wealthy clients are getting ready to leave if the Chancellor presses ahead with the tax in April as planned.
"Our clients have got their tax lawyers and accountants working on what is best for their affairs," he said. "I haven't got a mass exodus but I have got far more people ready for a mass exodus. There is massive concern. The worry for us is that if all the best properties come up at once that will effect the market."

Knight Frank also warned growing numbers of non-doms have been getting their homes valued in readiness to leave.

Robert Bartlett, chief executive of Chesterton, said the proposals have also put foreigners off moving to London.

"A number of prospective buyers from outside the UK have already put an investment in the London property market on hold until the question is resolved and some owners are considering selling before the tax is introduced," he said.

He warned that a fall in the number of weathly people wanting to live and work in London could see house prices fall across the whole market - good news for first-time buyers but not for homeowners and property investors.

"The Chancellor would be extremely unwise to introduce this tax," said Bartlett. "This tax will not only have a negative effect on the central London sales and rental market, but it will lead to a considerable loss of earnings in the City and a loss of a large amount of tax revenue generated by wealthy non-dom residents spending in the UK."

Darling hopes to raise an extra £650 million a year from the tax but the Treasury has faced fierce criticism for its plans ahead of next week's Budget, including from its own Trade and Industry Minister Lord Digby Jones.

Non-doms are concerned they are no longer welcome in this country and fear this is the thin end of the wedge and the levy could increase in the future.