25th Mar, 2020
A stamp duty surcharge for overseas buyers, planning reform and a fund to remove dangerous cladding were among housing-related measures announced, but how does all of this affect the market?
Landlord tax changes
Starting from the 1st April, landlords will receive a 20 percent tax credit towards all financing costs. This change will hit landlords with higher incomes, as they will no longer be able to claim up to 45 percent tax relief.
People borrowing money for property will now benefit from The Bank of England’s emergency interest rate cuts – which has come in response to the Coronavirus outbreak – in an attempt to steady the economy.
Sadly, the same can’t be said for savers, because more cheap money from the government means banks won’t be looking to attract savers with better rates on their accounts.
Stamp duty and Capital Gains Tax
The stamp duty surcharge for foreign buyers will now be 2% from April 2021. Capital Gains Tax is currently payable on property at the time it’s sold.
Following the budget announcements, the government will increase the capital gains tax allowance to £12,300 from the 6th of April 2020, and the time to pay the tax on a property sale will be cut to 30-days from the date of sale. We currently have between nine and 18 months to pay these costs.
However, there’s some good news – a new £1bn fund has now been introduced to remove all unsafe combustible cladding from any public and private housing higher than 18 metres.
Until now, planning applications have been lengthy and expensive processes. Following the announcements, the government will monitor plans more closely with councils to help speed up developments.
For further advice on the how the budget announcements could affect you as a tenant, landlord or buyer please contact our team of experts.
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