Property stocks are tanking after George Osborne's non-dom crackdown
Chancellor George Osborne just delivered the first Conservative Party budget in 18 years and one of the big announcements was a crackdown on so-called "non-doms" - people who live in Britain but claim their "permanent" home in abroad.
Those claiming the non-dom status have taxes on any money they earn abroad limited.
But Osborne just abolished the indefinite non-dom tax status, changing the rules so that anyone who has lived here for 15 of the last 20 years is now officially taxed the same way as any other Briton.
Property companies, especially at the top end of the market are now tanking, amid fears that wealthy foreigners who have flocked to London in recent years will be put off by the new rules.
House builders are the worst hit. Persimmon is down 4%, Berkeley Group is down 6%, Barrat Developments is down 4.4%, Crest Nichols is down 5.2%, Taylor Wimpey is down 3.3% and Bellway is off 4.5%.
Britain's non-dom status, which is unusual in global tax laws, made Britain an attractive place for oligarchs and emirs and has helped spur a huge influx of this type of foreign money into London's property market in recent years. That's led to booming property prices.
But there's been a growing backlash against non-doms, particularly those who are seen to be simply exploiting the system just to lower tax bills. HSBC's boss Stuart Gulliver was grilled by MPs over his tax arrangements, which was in part linked to his non-dom status.
The property world are already trying to play down the impact of the changes. Liam Bailey, global head of research at property consultancy Knight Frank, told Business Insider over email: "On their own, the changes to the non-dom tax rules will not have a profound impact on the prime London market, as demand is driven by a number of factors, and non-doms form only a part of demand.
"These reforms follow a series of changes in recent years that make it increasingly difficult to argue prime residential property is under-taxed. The relatively subdued nature of the prime London market since December's stamp duty changes highlights the risk of higher taxation on market demand and also Government revenues."
As well as the non-dom crackdown, property companies haven't been helped by George Osborne announcing a cut to tax relief for buy-to-let landlords. The buy-to-let market has also been booming in recent years.