Concept
London is the most open major housing market in the world. The registry and the state don't care what passport the buyer holds or where they live: a foreigner purchases an apartment on the same terms as a British citizen, without permits or quotas. All the regulation is hidden elsewhere—in the entry tax, which for a non-resident is assembled from three layers, in the public register of beneficial owners for companies, and in inheritance tax, from which a London apartment cannot be shielded by any structure.
Before counting the money, it's worth understanding the title structure. Freehold is full ownership; this is how houses are sold. Almost all London apartments are leasehold, long-term leases for 99–999 years. The shorter the remaining term, the cheaper the apartment and the more expensive the extension. Leasehold reform was adopted back in 2024, but its key valuation provisions still haven't come into force by summer 2026: if you're offered an apartment with a short lease "pending reform," this is a matter for negotiation with the seller, not a reason to hope for the legislature.
How the Transaction Works
For the purchase itself, nothing is needed—no tax number, no British account. The UTR number will be needed later, when rental income or a sale occurs, and the money for completing the transaction passes through the solicitor's client account. The solicitor is the central figure here: they verify the title, order searches, file the tax return within fourteen days after closing, register the transfer of rights, and—under anti-money laundering law—thoroughly verify the buyer's source of funds. The source of funds package should be assembled before you start negotiating.
The process itself is two-stage, and this must be understood from the very beginning. An offer doesn't obligate either party to anything: the seller can raise the price, the buyer can walk away. Obligations arise only upon exchange of contracts, when a ten percent deposit is paid. Completion occurs two to four weeks after exchange. The entire transaction for cash typically takes eight to twelve weeks.
Entry Taxes
The basic SDLT scale from April 2025 starts at zero on the first £125,000 and reaches 12% on the portion of the price above £1.5 million. Two surcharges are added to this, each on the entire price: five percent for an additional property and two percent for non-residence. The non-residence test is simple—fewer than 183 days in Britain over the twelve months around the transaction.
Let's calculate for a specific apartment at £2 million. The basic tax according to the scale is £153,750. The surcharge for a second property is another £100,000. The non-resident surcharge is another £40,000. Total £293,750, an effective rate of 14.7%. This is the real cost of entry into prime London.
If a company is buying and the price is above £500,000, instead of the scale a flat rate of 17% applies. This comes with an obligation for the foreign company to register in the Register of Overseas Entities with disclosure of beneficial owners and annual data updates: without an active number in this register, a company cannot buy, sell, or mortgage British real estate. The register is public—anyone can search for an apartment owner by name.
What the Purchase Provides
Nothing immigration-related. The investor visa was closed in February 2022, and no replacement "for passive money" has appeared. A tourist can stay in the country for up to six months per visit. There's also a flip side: owning property is an additional "tie to Britain" in the tax residence test, which reduces the safe number of days in the country. The owner of a London apartment who spends a lot of time there risks becoming a British tax resident sooner than planned.
Ownership and Rental
Ongoing expenses start with council tax—for an apartment in a good area, this is several thousand pounds per year. From April 2028, a new annual levy on properties worth more than £2 million will be added: from £2,500 to £7,500 per year depending on value. If the property is held by a company, ATED applies—an annual tax on "enveloped" housing: for a property valued at £2–5 million, this is £32,200 per year at 2026/27 rates. There's an exemption for genuine rental business, but a return must be filed anyway.
Rental income of a non-resident is subject to British tax at the standard scale, and from April 2027, separate, slightly higher rates are being introduced for rental income. If you don't register in the scheme for overseas landlords, the agent will withhold twenty percent at source. The economics of rental have also changed: from May 2026, the Renters' Rights Act is in effect—contracts have become open-ended, and eviction without cause is a thing of the past. London buy-to-let has become a business for the patient.
Why Offshore Wrapping Died
The classic scheme of the nineties and noughties—a London apartment in a BVI company—provided anonymity and protection from inheritance tax. Today it provides neither. Since 2017, shares in offshore companies whose value sits in British housing are themselves considered a British asset for inheritance tax. The ROE register discloses the beneficiary publicly. Only costs remain: seventeen percent on entry and ATED every year.
Therefore, housing "for oneself" is now purchased personally. A company—usually already a British Ltd—is justified only for a rental portfolio: corporate tax instead of a progressive scale and full deduction of loan interest, which has long been cut for individuals. Trusts don't save from inheritance tax on British housing either—they have their own regime of periodic charges.
Exit and Inheritance
Upon sale, a non-resident pays capital gains tax at rates of 18/24% and must file a return and pay within sixty days after closing—even if sold at a loss. For property purchased before April 2015, the gain is calculated from the 2015 value.
The real hidden risk of London real estate is inheritance. A British property falls under inheritance tax at forty percent above the £325,000 threshold regardless of where the owner lived or whose resident they were, and heirs will have to go through English probate. The 2025 reform replaced the non-dom regime with a long-term residence test, but for the apartment itself this changed nothing—it's always in scope. Other instruments work: life insurance for tax liquidity, leverage, joint ownership, and a properly drafted will. More details in the breakdown of foreign real estate succession.
Russian Passport
There is no ban on purchase for Russian citizens—restrictions apply only to those on sanctions lists and money from sanctioned banks. In practice, two filters operate. The first is a deposit ceiling of £50,000 for Russian citizens living in Russia; it doesn't apply to holders of British visas. The second is banking compliance: solicitors and agents are required to check sanctions lists, and the origin of Russian money is scrutinized particularly carefully. How to structure a payment route is covered in the hub on purchasing real estate abroad.
This material is for reference purposes and does not constitute individual legal advice.