"The government cannot package this up as a solution to the housing crisis - it is to raise revenue. "
Foreign buyers are expected to pay between 1% and 3% extra, on top of the existing stamp duty surcharge on second homes and buy-to-let purchases.
The Conservatives say they plan to spend the extra levy on tackling homelessness.
Speaking to Andrew Marr yesterdaym Theresa May said:"The money we raise from this extra stamp duty is going to be spent on dealing with the issue of rough sleeping."
The plans are expected to be reiterated during this week's Convervative Party Conference.
However the government have been criticised by some for introducing the surcharge as a 'cash grab', for 'tinkering' with the stamp duty system, and for not going far enough to tackle the issue of homelessness.
Paula Higgins, chief executive of HomeOwners Alliance, commented: "The government cannot package this up as a solution to the housing crisis - it is to raise revenue. We obviously support the idea of treating investors differently to home buyers - and, of course, using the cash raised through this surcharge to support rough sleepers. But if May is attempting to position this as a panacea for the fact hundreds of thousands of would-be buyers have essentially been locked out of the property market she is wrong.
"Stamp Duty does need an overhaul. At the moment the government is simply tinkering with a hugely flawed system and often making things worse in the process - as the tax hike on second homeowners proved with thousands of buyers overpaying now waiting to get a refund. The government needs to think through the implications and ensure there are no unintended consequences or loopholes. Only those people (or companies) buying residential property in the UK who do not have the right to residency here (and so can never live in the property) should pay. That would help ensure the right balance between UK resident householders and international investors, and keeping the UK open.
"However, Stamp Duty is just one of a myriad of issues in the housing market and a more comprehensive approach to tackling the crisis is needed if we’re ever to get out of it."
Caroline Takla, managing partner of prime London buying agency The Collection LLP, added: “Theresa May’s plans to impose a new high rate of SDLT for non-resident buyers is another knee jerk reform to what is fast becoming a punitive tax. The idea that this levy will help tackle homelessness is a noble one, but I think this is a cynical distraction. One could argue that homelessness has not been caused as a direct consequence of non-resident ownership in London, but rather from imposition of many years of austerity.
"SDLT receipts are perceived as an easy way for the government to raise revenues, and with Brexit costing the UK economy £500m per week it is a simplistic solution to try and fill the monetary crater left in HM Treasury’s coffers. The Prime Minister can't have her cake and eat it. If high SDLT deters foreign buyers then it won't raise any significant tax and similarly if it works in terms of increasing revenues, it can't have put off non-residents.
"The market will eventually adapt but it will be sellers not buyers that experience the impact of this, as no doubt the additional cost will be factored into the amount paid. Even if buyers aren’t non-resident, anyone well advised will understand that the resale value of an asset that they are considering buying (particularly in PCL) will be negatively impacted if the pool of buyers wishing to eventually purchase is diminished further.
"Non-residents do not receive any additional tax breaks when it comes to capital gains, inheritance tax or tax on rental income. In fact, the majority will pay the additional 3% surcharge that was introduced on second homes and investments. If they own in a company, they pay an additional annual tax pegged to the value of their property.
"The new build sector will be most affected as developers will have to take a hit on prices. Unfortunately, this is a sector that supports many jobs in construction, architecture, interior design and sales and will likely have a knock-on effect on unemployment which can only fuel some of the challenges that this new tax is trying to address.”
