What is ‘your own home’ for the purpose of the Investor Immigration Rules?
For investors who first applied to enter the category prior to 6 November 2014, not all the investment cash must be invested in the UK. Up to 25% of the total funds relied upon can be held on deposit in a UK account or used to purchase assets, including property, in the UK. Those who applied to enter under the Rules in place on or after 6 November 2014 must invest all of their funds.
In relation to those who want to rely on property, the Immigration Rule, as currently drafted, states as follows:
‘When using property, only the unmortgaged portion of the applicant’s own home can be considered. The property must be owned by the applicant (or applicant and/or the husband, wife, civil partner, or unmarried or same-sex partner of the applicant) and the valuation must be provided on a report issued by a surveyor (who is a member of the Royal Institution of Chartered Surveyors) in the six months prior to the date of application’
This can raise a number of questions for investors who wish to rely on property.
Who owns the property?
Prior to 19 November 2015, this provision did not specify that the property must be owned by the applicant and/or applicant’s partner. This change was made in the Statement of Changes HC535 29 October 2015 and the explanatory memorandum describes the change as a ‘clarification’ rather than a change. This could be problematic for an investor who has jointly purchased a property with someone who isn’t their partner, for example a parent or a child, even if they personally would consider this to be their own home. The previous drafting of the immigration rules which would have applied at the time that all relevant investors would have entered the category did not prohibit relying on property owned by multiple parties, but it is the current draft that investor’s will need to meet when making their extension applications.
Any investor who wishes to rely on a property that has been purchased with someone other than their partner should seek legal assistance.
What constitutes a home?
The Immigration Rules specifically refer to the property as being the investor’s home, rather than property. The Rules, the policy guidance, and the modernised guidance do not provide any further definition of what is meant by ‘home’. It can be reasonably assumed that the intention is that this is the place that the investor lives. The Rules, however, are not clear on if an investor can rely on a property if they live in two different places or if they share their home with people other than their immediate family. A property which is entirely rented out is unlikely to be considered the investor’s home, but what if a single room is rented out and the investor continues to live there? The Immigration Rules and accompanying guidance give no indication of how a caseworker should treat this situation.
How much of the value can be relied upon?
An investor who is relying a £1 million investment, can rely on up to £250,000 of their property. They can only rely on the unmortgaged portion of the property.
The Immigration Rules are not clear, however, on what they consider to be the value of the property, which an investor can rely on. The investor must provide documents which show the value of the asset and the date that the asset that was purchased. The valuation for a property must be dated in the six months prior to the date of the application rather than at the date of the purchase.
Is, then, the purchase price irrelevant? An investor who spends £300,000 on a property, which due to reasons beyond their control is damaged and three years later when they come to get their valuation for the extension application, find that their property is now only worth £200,000. A strict reading of the Immigration Rules would suggest that this would not meet the requirements of the rules.
Or what about an investor who buys the damaged property for £200,000, but spends an additional £50,000 making the property habitable again. Is it possible to rely a £250,000 valuation once the work has been completed or does the investor need to show additional assets or cash maintained?
If this could impact your application, an investor should seek legal advice at the earliest opportunity.
Conclusion
The complexities of these Rules have to some extent been addressed by the removal of the ‘balance of funds’ provisions and the requirement since 6 November 2014 that investors invest the entirety of their investment funds in specified investments. However, there are a large number of investors who did enter the category prior to this change and will need to calculate if they can rely on property and if so, how much?
Contact Us
For detailed advice about how your property will affect your application, contact one of our immigration barristers for further advice on 0203 617 9173 or info@richmondchambers.com.
