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British government will levy foreign property owners on selling homes that are not their primary residence, Finance Minister George Osborne announced on Thursday in his autumn budget statement.
Osborne said a capital gains tax would be imposed on foreign sellers of homes in Britain from April 2015, which is regarded as a measure taken by the British government to control the recent surging house prices in the country, especially in London.
The finance minister said: "It's not right that those who live in this country pay capital gains tax when they sell a home that is not their primary residence while those who don't live here do not. "
Official figures show that house prices in Britain increased by 3.8 percent in the 12 months to September, up from 3.7 percent a month ago, while prices in London have jumped by about 10 percent in the period.
Foreign home buyers have been blamed for the rocketing house price in London as economists believed there is a housing bubble in the London market.
While announcing the plan on capital gains tax on foreign house owners, Osborne also explained that Britain is an open country that "welcomes investment from all over the world, including investment in our residential property."
Osborne was delivering his budget statement to parliament, the second of the two most important economic statements the finance minister makes every year.
Osborne said that according to predictions of the Office for Budget Responsibility (OBR), Britain's house prices will drop in the coming years to be 3.1 percent lower in 2018 than the 2007 peak period.
He also stressed that the Bank of England (BOE), the central bank, has power to take action to ensure a functioning, stable housing market.
The BOE has recently refocused the Funding for Lending Scheme (FLS) to remove the element of stimulus for house loans, and concentrated more on business loans. This revision comes into effect at the beginning of 2014.
Figures from the BOE showed that net lending by participants in the FLS scheme jumped by 5.8 billion pounds (9.5 billion U.S. dollars) in the third quarter, which was the largest increase. Total net lending amounted to 8.7 billion pounds in the third quarter, with 5.1 billion pounds going to the household sector and 3.6 billion pounds to businesses.
