International Buyer’s Guide to London Property

International Buyer of London property

London’s property market attracts more international investment than any other city in Europe. Buyers from the Middle East, Asia, the United States, and continental Europe are active across every segment — from ultra-prime apartments in Mayfair and Knightsbridge to buy-to-let investments in Hackney, Walthamstow, and Stratford. However, purchasing London property as an overseas buyer involves additional tax considerations, legal structures, compliance requirements, and financing complexities that UK-based buyers do not face. This guide covers everything an international buyer needs to know.

Tax Considerations for International Buyers

Stamp Duty Land Tax (SDLT)

International buyers pay a 2% surcharge on top of the standard SDLT rates. For a property purchased at £2 million, the standard SDLT is £113,750 — the overseas buyer surcharge adds £40,000, bringing the total to £153,750. If the property is an additional home (not the buyer’s only residence), a further 5% surcharge applies. Combined, an overseas buyer purchasing a £2 million London investment property could pay over £193,750 in SDLT — nearly 10% of the purchase price.

Annual Tax on Enveloped Dwellings (ATED)

Properties held through corporate structures (companies, partnerships, collective investment schemes) with a value above £500,000 are subject to ATED — an annual charge ranging from £4,400 to £269,450 depending on the property value band. Reliefs are available for genuine property rental businesses, property developers, and certain other qualifying uses.

Capital Gains Tax

Non-UK residents have been subject to UK Capital Gains Tax on the sale of UK residential property since April 2015. The rate is 18% for basic rate taxpayers and 24% for higher rate taxpayers (2024-25 rates). Properties held through companies are subject to corporation tax on gains.

Income Tax on Rental Income

Rental income from UK property is subject to UK income tax regardless of the owner’s residence status. Non-resident landlords can register with HMRC under the Non-Resident Landlords Scheme to receive rent gross rather than having tax deducted by the letting agent or tenant.

Legal Structures for International Buyers

International buyers commonly purchase through personal names (simplest, but exposes the buyer to SDLT surcharges and inheritance tax), UK limited companies (offers income tax efficiency and inheritance tax planning, but triggers ATED and requires annual compliance), offshore companies registered in BVI, Jersey, Guernsey, or Luxembourg (historically popular for privacy and inheritance tax planning, but since 2022 the Register of Overseas Entities requires disclosure of beneficial owners to Companies House), or trust structures (used for inheritance planning, particularly by Middle Eastern and Asian families).

The choice of structure affects stamp duty, annual tax, capital gains tax, inheritance tax, and financing options. We recommend taking professional tax and legal advice before committing to a structure — the wrong choice can cost hundreds of thousands of pounds over the holding period.

Financing Options for International Buyers

Bridging Loans

Bridging loans are the most common financing route for international buyers because they can complete in 10-14 working days, they are available to non-UK residents and offshore entities, the underwriting focuses on the property and exit strategy rather than UK income, and they bridge the gap while longer-term finance (private bank mortgage, international mortgage) is arranged. We arrange bridging loans for international buyers across London — from ultra-prime acquisitions in Belgravia, Chelsea, and St James’s to investment purchases in Canary Wharf, Greenwich, and Bermondsey.

Private Bank Mortgages

For high-net-worth international buyers, private banks (Coutts, C. Hoare, Arbuthnot Latham, HSBC Private Bank) offer competitive long-term mortgage rates. However, the application process takes 3-6 months due to enhanced due diligence on international wealth sources. A bridging loan secures the property while the private bank mortgage is arranged.

International Mortgage Lenders

Several specialist lenders offer mortgages to non-UK residents — including some high street banks with international banking divisions. Terms are typically less competitive than domestic mortgages (higher rates, lower LTV, higher minimum income requirements) but provide long-term finance without requiring UK residence.

Anti-Money Laundering (AML) Requirements

International property purchases in London are subject to stringent AML due diligence. Solicitors, estate agents, and lenders are all required to verify the identity of the buyer and the beneficial owners of any corporate structure, the source of funds used for the purchase, and the source of wealth of the beneficial owners. This process can take 2-6 weeks for complex international structures and requires documentary evidence — bank statements, company accounts, tax returns, and third-party verification of wealth sources. Starting the AML process early is critical to avoiding delays at exchange.

The Register of Overseas Entities

Since August 2022, any overseas entity that owns or wishes to purchase UK property must register with Companies House and disclose its beneficial owners. Failure to register prevents the entity from buying, selling, or creating charges over UK property. The registration must be updated annually. This applies to entities registered in any jurisdiction outside the UK — including BVI, Jersey, Guernsey, Cayman Islands, and all other offshore jurisdictions commonly used for London property ownership.

Where International Buyers Purchase in London

International buyer activity is concentrated in prime Central London — Mayfair, Knightsbridge, Belgravia, Chelsea, Kensington, and Holland Park — where the combination of world-class architecture, proximity to embassies and international schools, and established international communities creates a natural home for global wealth. St John’s Wood, Regent’s Park, and Hampstead attract families seeking larger houses and green space. Canary Wharf and the South Bank attract Asian and Middle Eastern investors focused on capital appreciation and rental yield. More recently, international investors have expanded into Battersea (the Power Station development), Nine Elms, and Greenwich, seeking better value while retaining strong capital growth potential.

Frequently Asked Questions

Can I get a mortgage in the UK as a non-resident?

Yes. Several specialist lenders and private banks offer mortgages to non-UK residents. Bridging loans are also available and complete much faster — 10-14 working days compared to 3-6 months for an international mortgage.

Do I need a UK bank account to buy London property?

A UK bank account is not strictly required for the purchase, but it simplifies the process — particularly for SDLT payments, utility transfers, and ongoing property management. Most solicitors can receive completion funds from international accounts subject to enhanced AML checks.

What is the overseas buyer SDLT surcharge?

An additional 2% on top of all standard SDLT rates. This applies to any buyer who is not UK-resident for tax purposes and has not spent 183 days or more in the UK in the 12 months preceding the purchase.

Does Platinum Global charge a fee?

No broker fee on facilities of £500,000 or above.

Speak to Platinum Global

Platinum Global Bridging Finance has extensive experience arranging bridging loans for international buyers purchasing London property. From AML compliance to offshore structuring, we manage the financing process from initial enquiry to completion. Contact us at 64 Knightsbridge, London for a confidential discussion.