The Chancellor Rishi Sunak has been announcing his budget proposals.
Here’s a quick summary of the measures that could affect the property sector.
Stamp Duty Holiday
The Stamp Duty Holiday currently in force will be extended until June 30th on properties up to £500,000. Then from July the Stamp Duty Holiday will continue until September 30th but with the upper limit being reduced to £250,000.
It is expected in October the Holiday relief on Stamp Duty will be removed.
Hopefully with the long extension it will remove some of the pressure on purchasing properties as the current Stamp Duty deadline has caused a backlog of mortgage applications and increased processing times.
Corporation Tax
For those landlords who have incorporated (as well as estate and letting agency businesses) there will be an increase in Corporation Tax from 19% to 25% in the new tax year starting April 2023.
There are further changes to be announced about how it will be applied.
This could potentially affect a number of landlords as being incorporated has become more and more popular in the buy to let sector.
Capital Gains Tax
There has been no announcement in the budget on Capital Gains Tax.
There are rumours that there is to be an extensive consultation on changes but nothing concrete as yet.
Government Guaranteed Loans
As you may have seen in the press there were leaks that the government were looking at guaranteeing mortgage loans for buyers.
The chancellor confirmed that there will a guaranteed loan scheme that will come into effect next month (April 2021).
The government scheme will guarantee 95% mortgage loans on property purchases up to £600,000. It is unlikely that this will apply to investment purchases.
Business Rates
There was some good news for Estate/Letting Agents and other business that there will be a 100% business rate holiday until June 30th and an approx. 66% relief after June.
Here’s a few of the other announcements:
– Furlough to be extended until September 30th.
– More self-employed people will be eligible for help.
– £20 uplift in Universal Credit to be extended for another 6 months
– Minimum wage to increase to £8.91 an hour from April.
– No changes to rates of income tax, national insurance or VAT. Although thresholds to be frozen.
– Personal income tax allowance to be frozen at £12,570 from 2022 to 2026.
– Higher rate income tax threshold to be frozen at £50,270 from 2022 to 2026.
– Apprenticeship grants to rise to £3,000.
– No rise this year in fuel or alcohol duties.
– Re-opening grants for non-essential businesses of up to £6,000 for most premises, and £18,000 in exceptional circumstances.
– Another £400m to help arts venues in England to reopen and £300m for professional sport and £25m for grassroots football to reopen.
– An additional £19m for domestic violence programmes and £40m for Thalidomide victims.
Thanks for reading…
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