Why London and UK home prices are so high?

Britain has a tax law that allows for non-domiciled residents to pay no income tax on their world (outside UK) income.

Instead they pay a relatively small static amount of tax (not a percentage) for this privilege.

Non-domiciled according to the tax law means that they have a home in a different country that they maintain and plan on moving to in the undetermined future.

So the mobile global rich want to live in the UK to avoid paying a percentage on their income.

They come to live mostly in London and bid up the property prices. More money chasing the same amount of product (in this case housing) causes the price to increase. This has a ripple effect as those who would have bought in London buy elsewhere, and increase the prices there, and on it goes.

It is very difficult for someone born in Britain to get this status, but a few millionaires have, so the middle class is left paying all the taxes and can’t afford to buy a house. It’s a win-win. 🙁

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