The End of Londongrad? Ownership transparency and Offshore Investment in Real Estate

Matthew Collin, Florian M. Hollenbach and David Szakonyi
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Matthew Collin: EU Tax - EU Tax Observatory, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, NMBU - Norwegian University of Life Sciences
Florian M. Hollenbach: CBS - Copenhagen Business School [Copenhagen]
David Szakonyi: GW - The George Washington University

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Abstract: This paper studies the impact of beneficial ownership transparency in the British real estate market. In an effort to reduce illicit investment following the invasion of Ukraine, the UK government announced a new law in 2022 requiring offshore companies that owned domestic real estate to identify their ultimate owners in a public register. Using a difference-in-difference framework, we find that new property purchases by companies registered in tax havens fell relative to those made via non-havens, a result consistent with transparency raising the costs of illicit investment. These declines persist even after dropping tax havens favored by Russians, suggesting that the reform drove the decline, rather than sanctions. We do not find strong evidence of price effects nor substitution into ownership through suspicious domestic companies. While the policy does appear to have been effective at deterring some anonymous investment into the British property market, incomplete implementation led some clients to still successfully shield their ownership information, implying scope for better design and enforcement in the future.

Keywords: Illicit financial flows; tax havens; real estate; transparency; hidden wealth (search for similar items in EconPapers)
Date: 2025-03
Note: View the original document on HAL open archive server: https://pse.hal.science/hal-05046763v1
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