Foreign companies which own or buy property in the UK will have to disclose their ultimate owners in new rules that attempt to combat money-laundering.
Business Minister Greg Clark announced that a public register will be introduced by early 2021 after the government came under pressure to increase transparency and prevent corruption.
Corrupt foreign ownership is said to keep property prices in Britain artificially high, particularly in London which has seen an influx of foreign property investment in recent years.
The 2016 “Panama Papers” helped to shine a light on firms and individuals using complex structures to base themselves abroad, putting the issue of tax avoidance at the top of the global agenda.
Since 2004, Britain has launched criminal investigations into more than £180 million worth of real estate suspected of being linked to corruption, with over 75% of properties still being looked into using offshore secrecy.
“This world-first register will build on our reputation for corporate transparency as well as helping to create a hostile environment for economic crimes like money-laundering,” said Clark.
Lord Faulks, a former Tory justice minister, and Lord Hodgson had called on the government to establish a register within 12 months.
Rachel Davies Teka, head of advocacy at Transparency International UK, said: “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.
“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.”
What is DealMakerz Prime?
In depth stories
Want to know the story behind Britain's latest property mogul? Why a company is going bust? Our coverage goes beyond run-of-the-mill news on key real estate issues.
High powered community
Our subscribers are made up of the most influential Founders and CEO's in UK property. Gain a competitive edge and get informed - read what they read.
Exclusive guest articles
Understand exactly what the most senior figures in UK property are thinking. Exclusive opinion articles from powerful real estate influencers that move markets.