Investors have reportedly raided London for over £100bn worth of property using overseas companies in the past six years.
Land registry data, obtained through a freedom of information request by Private Eye, shows 27,989 purchases of homes, buildings and land in London since 2008 involved companies based in tax havens. Two-thirds of these purchases were reportedly made by companies in four British tax havens – Jersey, Guernsey, the Isle of Man and the British Virgin Islands.
Wealthy buyers often use companies to avoid inheritance or capital gains tax. They used to also use companies to avoid stamp duty, but in the 2014 Budget the Chancellor slapped a levy of 15 per cent of the property price on companies purchasing properties worth over £500,000.
The use of these companies has often been linked to money laundering and has been blamed for pricing ordinary Londoners out of the housing market.
Green London Assembly member Darren Johnson told the Evening Standard: “The Mayor [Boris Johnson] has been too relaxed about investors buying property in London.
“These figures show a huge volume snapped up via tax havens — and whether it’s laundering money through a Chelsea mansion or dodging tax in a major regeneration project, Londoners are losing out.
“I want the Mayor’s deputy to be frank with the big property developers. They need to build homes for Londoners to live in, not assets for investors and tax accountants.
“He should also lobby government for full transparency and tighter rules to block tax avoidance, including requiring that the beneficial owner is declared for all property and land in the UK.”
Johnson has previously said the capital should not stop rich foreigners purchasing London property and said the best way to combat the issue was to build more homes.
Positive Lending chairman John Malone says: “Back in May 2002, I wrote an article for Money Marketing titled: ‘Will our junior doctors of today ever be able to afford to buy a property in London?’. At that time I suggested to the Government that there should be different tax and stamp duty requirements for those purchasing a property through nefarious means.
“Back then we hadn’t really considered the impact that money laundering could have on property purchases in and around the London area as it does today.”