Category: budget (1)

In case you were visiting another planet this week and missed it, the 2016 Spring Budget popped out of George Osborne’s little red briefcase like a bouncy Easter bunny. Sadly, not bringing chocolate with it…but some good news for the property sector.

1. First-time buyers saving for a deposit given a boost

The Chancellor announced a new Lifetime ISA, which will be available from April 2017 for savers who are aged under 40. Holders of the Help to Buy ISA, which launched last December, will be able to roll up any savings into the Lifetime ISA without losing their tax-free benefits.

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Total savings into ISAs each tax year – whether used to buy your first home, move up the property ladder or other purposes – will leap from £15,240 to £20,000 from April 2017.
2. Osborne’s 3% Stamp Duty surcharge pressing ahead from April

The Chancellor stuck to his guns on implementing a 3% Stamp Duty surcharge on the purchase of additional properties – the loading will come into effect from 1 April as planned. Based on the £290,902 current average value of a UK home, the new 3% loading will see prospective landlords and second homeowners see their Stamp Duty bill soar from £4,545 to £13,272.
Did you know? The 3% surcharge won’t apply to property priced under £40,000
The Chancellor confirmed in his Budget that larger residential property investors will be liable for the 3% surcharge – in the Government’s initial consultation, investors ‘bulk buying’ 15 or more residential homes had been earmarked for exemption.
The 18-month window during which time those buying a new main residence but unable to sell their previous one, could claim a refund of the 3% surcharge, will be doubled to 36 months. The same grace period will apply if a main residence is sold but there is a delay on the purchase of a new one.
Osborne said he will use the additional tax raised to support community-led housing developments, such as a £20m project to help young families onto the housing ladder in the South West of England.
He also announced a major new package of support worth over £115 million to support those who are homeless and reduce rough sleeping.
3. Stamp Duty slashed on commercial property

Buyers of commercial property will benefit from a cut in Stamp Duty rates. This includes a zero band on purchase prices of up to £150,000; a 2% rate on the next £100,000; and a 5% top rate above £250,000.

4. High speed rail links are full steam ahead

The Chancellor gave the green light to the High Speed 3 rail service between Leeds and Manchester. This will reduce journey times by 40% and will allow people to live easily in one northern city and work in another, a pivotal factor when it comes to where to buy a home.
Osborne is taking recommendations from the National Infrastructure Commission on northern connectivity and committing £300m towards High Speed 3 and road upgrades. This includes a new Trans-Pennine tunnel under the Peak District, running between Sheffield and Manchester.
He also commissioned Crossrail 2, which will connect south west and north east London, while reducing congestion on the Tube network and pressure on Victoria and Waterloo stations. The government will be putting £80m towards the project.
The first Crossrail – or the Elizabeth Line as it’s now known – has already had a dramatic impact on the property prices along the route (see below for our infographic) and Crossrail 2 could have a similar effect.

5. Capital Gains Tax reductions – but not for residential property

The Chancellor slashed the rate of Capital Gains Tax from 28% to 20% for higher-rate taxpayers, and 18% to 10% for basic-rate taxpayers. But buy-to-let investors won’t benefit, as the reduced rate will not apply to residential property.

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