• Fri. Jul 19th, 2024

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Budget 2016: “Low key for property”

kis-logoA leading property expert has responded to this afternoon’s budget, which saw George Osborne announce new measures helping young people save up for their first home and a tax break for people who rent out rooms on Airbnb.

Property policies announced by the Chancellor in his annual statement included:

  • Allowing under-40s to open “Lifetime ISAs” where for every £4 they save, the government will give them £1. The money can be used to save for a property.
  • Excluding residential property sales from the cut in Capital Gains tax from 28% to 20%.
  • Tax allowances of £1000 for digital “micro-entrepreneurs” – including those who rent out rooms on website like Airbnb.
  •  Confirmation that the 3% Stamp Duty surcharge on second homes and buy to let properties will go ahead.

The Chancellor also used this afternoon’s speech to lower his growth predictions for this year from the 2.4% forecast in November’s Autumn Statement to 2%. He also revised down predictions for next year, to 2.2% and 2.1% in 2016-17 and 2017-18, from 2.4% and 2.5% four months ago.

The threshold for small business rate relief will be permently raised from £6000 to a maximum of £15,000 and for the higher rate from £18,000 to £51,000 – meaning that from from April 2017 600,000 small businesses will pay no business rates at all.

Property Expert Ajay Jagota is founder and Managing Director of North-East based sales and lettings firm KIS and creator of d_lighted, a rent-free insurance backed deposit-free renting solution which slashes the costs of tenants finding homes and landlords finding tenants.

He said:

“It’s not long ago that George Osborne was single-handedly revitalising the property market by announcing the Help to Buy scheme in his budget, but there was nothing of that scale from a property perspective today.

“The Chancellor spent almost as much time talking about repairing cathedrals and lowering tolls for bridge crossings than he did property, but this clearly wasn’t a budget designed with housing in mind.

“Clearly George Osborne’s focus today was more on savers and small businesses – both of which of course many landlords and property firms are.

“The housing measures he did announce are to be welcomed. Any initiatives which help young savers put aside the money they need to buy their first home are to be welcomed, so the announcement that the government will top up money they put aside to purchase property is a positive one.

“Perhaps the industry should consider itself lucky. George Osborne’s last two budget statements contained very nasty surprises for the private rented sector when they restricted mortgage interest tax relief and Wear and Tear allowances on buy to let homes and announced a 3% stamp duty surcharge on additional properties – the so-called ‘landlord tax’ – which he confirmed today.

“Those changes are forcing landlords to choose between putting rents up or selling up, reducing the availability, which also puts rents up. Either way, it’s renters who really lose out – and I can’t imagine many of the landlords hit by that tax hike are very impressed to see a tax cut for people who rent out rooms on Airbnb.

“It was a relief though to see residential property excluded from the cut in Capital Gains tax. Although that cut would have been a big boost for people selling property, all the talk was that such a move would be aimed at cooling the housing market in London.
“London-centric solutions to property issues inevitably miss the national picture. If you slowed down the housing market in the capital the ripples you create will eventually reached a North East property market

By admin