A public register revealing the true owners of overseas companies buying property in the UK will not happen until at least the summer 2021, it has been announced.
The Government has confirmed that while draft legislation will be tabled this year, primary legislation will not be on the agenda until summer 2019, missing the original deadline of this year which means that the register will not operational until 2021.
The failure to meet the original deadline has come under criticism from the Mayor of London and Transparency International UK. The register is regarded as vital in cracking down on corrupt wealthy overseas buyers using companies to buy property, particularly in London, to launder money.
More than £122 billion of property in England and Wales is owned by offshore firms. ‘It’s excellent that this register will be up and running by 2021, ensuring dirty money can no longer be used to buy property under the guise of a shell company,’ said Mark Hayward, chief executive of National Association of Estate Agents (NAEA).
‘Houses bought with laundered money often sit empty, taking homes away from the market that could be used for families and as such impacting the wider community. It’s important to know who the ultimate owner of a property is if we wish to maintain integrity in our property market,’ he added.
But there is severe criticism of the delay. ‘Although I welcome a clear timetable being laid out, I am disappointed by the significant delay to primary legislation given the fact that the policy has cross party support, and has already undergone two consultations,’ said Rachel Davies Teka, head of advocacy at Transparency International UK.
‘The longer we have to wait for this register, the longer corrupt individuals will be able to use the UK property market to hide their wealth. Giving the public transparency over the real owners of London’s multi-million pound properties would strike a huge blow against corrupt individuals who view our homes as nothing more than safety deposit boxes to hide their loot,’ she explained.
She pointed out that it means that secretive company owners are effectively being given additional time to make their own arrangements. ‘They have known this was coming for two years already. The Government should publish draft legislation before Easter, so that a Bill can be put before MPs in the current parliamentary session,’ she added.
The Mayor of London Sadiq Khan has also called on the Government to speed up plans for the public register. He said that research shows that 44% of all the UK properties owned by overseas registered companies are located in London.
Khan has long believed that the legal and beneficial ownership of companies and other entities that own UK property should be more transparent, to help prevent offences such as tax evasion, theft and terrorist activities.
The Mayor also wants the register to be backed up by effective sanctions for those not complying, In addition, he called for money laundering checks on the purchasers, as well as vendors, of properties.
‘The Government’s slow pace of progress on this issue has been bitterly disappointing. If the proposed timetable slips even slightly, the publication of this much needed register could easily have taken a decade since a commitment to greater transparency was first made by the Prime Minister at the time. For an issue which is of such importance in London, this is completely unacceptable,’ Khan said.
‘I urge the Government to prioritise the publication of draft legislation and ask the Prime Minister to give it full backing in Parliament. Londoners deserve to know the identity of those that own property in their city, and we have waited long enough for Government to fulfil its commitments,’ he added.
