Taxation & Invisibility
Nadeem Walayat has been calling for bull markets in the U.K. and U.S. housing for quite a few years pinning his argument to:
"...an exponential inflation mega-trend which is the primary consequences of perpetual money and debt printing monetization programmes that the government is engaged in, in an attempt to buy votes through high deficit spending, an inflation trend that asset prices are leveraged to and oscillate around..."
I think real estate prices are zooming in London for another reason: TAXATION. Martin Armstrong makes the observation that:
Unlike the USA, Britain does not tax worldwide income. The rich have flocked to London by the boat and plane load and this is driving property prices way up and you see more high end cars everywhere – many with Arab plates.
The French “rich” have left France and many moved to London. Yet this is still just a tiny fraction of the trend. Since you do not pay taxes just to live there on your earnings outside of Britain, they can live in London effectively tax free ON THAT FOREIGN income.
Behind a New York City deed, there may be a Delaware LLC, which may be managed by a shell company in the British Virgin Islands, which may be owned by a trust in the Isle of Man, which may have a bank account in Liechtenstein managed by the private banker in Geneva. The true owner behind the structure might be known only to the banker. “It will be in some file, but not necessarily a computer file,” says Markus Meinzer, a senior analyst at the nonprofit Tax Justice Network. “It could be a black book.” If an investor wants to sell the property, he doesn’t have to transfer the deed—an act that would create a public paper trail. He can just shift ownership of the holding company.