Thu 17 Mar 2016 View all news articles
In yesterday's budget, the Chancellor, George Osborne, has announced a number of measures which will impact the property industry.
The Chancellor confirmed that 3% stamp duty surcharge on the purchase of second homes and buy-to-let properties will go ahead from April 1.
He also announced that larger investors will not be exempt from the stamp duty changes – meaning all purchasers of buy-to-let properties will pay the additional tax.
The funds generated, he says, will fund local housing schemes. In particular, £20 million will be put towards helping young families in the South West on to the housing ladder via community land trusts.
This will affect the UK's fledgling Build to Rent industry, which encourages institutional investment in the Private Rented Sector (PRS).
'Micro entrepreneurs' will also be handed a £1,000 a year tax break, presumably benefitting people who let properties through short-term lets sites like AirBnb – although full details of this are yet to emerge.
Osborne also announced that commercial stamp duty rates will be reformed, starting from midnight tonight.
As with the residential tax reform announced in 2014, the 'slab' system will be replaced with a more progressive 'slice' system.
Purchasers of commercial property will pay 0% up to £150,000, 2% on the next £100,000 and 5% above £250,000.
These changes are likely to be welcomed by small business owners and property investors, however the 5% band could affect the market for larger commercial properties.
Osborne says that 90% of small firms will benefit from the commercial stamp duty reform.
In a boost for first-time buyers, the Chancellor announced the introduction of a Lifetime ISA for under 40s. The government will give saves £1 for every £4 they put away.
Savers will be able to put away up to £4,000 each year until they are 50 – it will be introduced from next April.
From April 6, Capital Gains Tax will also be cut from 28% to 20% for higher rate taxpayers and from 18% to 10% for basic rate taxpayers.
However - a further disappointment for the UK's landlords - gains on residential property will be taxed at the current rates.
Source: Estate Agent Today
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