31 October 2018

Budget 2018: What it means for property

Chancellor Philip Hammond delivered his final Budget before Brexit this week, announcing that austerity is coming to an end. Following previous Budgets where stamp duty was hiked on more expensive properties and buy-to-let was hit with much tougher taxes, it was a relief that this Budget largely left property alone, despite housing being high on the political agenda.

However, there were a few property measures, namely:

* Shared ownership and first-time buyers – last November, the Chancellor abolished stamp duty for first-time buyers on properties costing up to £500,000. This was only for those buying mainstream homes but it will now be extended to those buying shared ownership homes and backdated to last year. With a limited number of people buying using shared ownership, this won’t help a great number of purchasers.

* Help to Buy to be extended until 2023 for first-time buyers only.

* A stamp duty surcharge on buyers from overseas is proposed at 1 per cent, rather than the 3 per cent originally suggested by Theresa May at the Conservative party conference, and a consultation will be launched in the New Year. This still seems like an unhelpful move that would simply deter foreign buyers who are not responsible for driving up UK property prices. It is unlikely to solve the housing crisis, whereas the building of more affordable housing in particular would help improve the situation.

* Capital gains tax (CGT) relief will be limited on properties where the owner is in shared occupancy with the tenant, such as the Rent a Room scheme. Other proposals, such as CGT relief if a landlord sells a rental property to a sitting tenant who has lived in the property for at least three years, were not followed up, even though it is an interesting idea worth exploring. Such a proposal could appeal to landlords who are thinking about selling because of tougher tax and regulatory changes.

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