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Sadiq Khan calls for new rules to allow seizure of property owned by Putin allies
The mayor of London has called for new rules that would allow properties in London owned by allies of Russian president Vladimir Putin to be seized.
In response to Russia’s invasion of Ukraine, Sadiq Khan has said that he wants to see tougher levies and sanctions brought against those close to the Kremlin who have bought properties in the capital.
According to Transparency International UK, there are around 100 properties in London, worth £1.1bn, that are owned by Russians with links to Mr Putin and the Russian authorities. London has become an ever more popular place for Russian oligarchs to buy property; in many cases as a way of hiding assets.
In addition to bringing in powers that would allow these properties to be seized, Mr Khan is also calling on the government to raise the amount of money overseas buyers have to pay for leaving their home empty, as well as increasing capital gains tax from 20% to 40%.
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The mayor would also want to see an increase in taxes paid by overseas companies investing in property by putting up the annual tax on enveloped dwellings. This is a tax paid by overseas companies that own property in excess of £500,000.
The mayor’s office has said that these would only apply to residents who live overseas and not those who live permanently in London, and this would be worked out through a residency test.
Analysis by City Hall has estimated that this could raise up to £370m a year, with the mayor saying this money could be used to fund the construction of 2,500 new council homes.
Mr Khan said: “For far too long ministers have turned a blind eye to the use of our capital’s homes as a safe harbour for oligarchs to park their cash, which is having a negative impact on both our international reputation and our local housing market. Now is the time to act.
“London will always be open to foreign investment and the millions of people from around the world who choose to make our city home. But we must take proactive measures to insist on a greater contribution from overseas buyers, clamp down on those who look to exploit our openness, and use the money to invest in social and other low-cost homes for Londoners.”
