Announced in Budget: Stamp Duty Change and Business Rate Holiday
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March 2, 2020
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March 19, 2020As the plan of the Conservative Manifesto 2019 election; there will be 2% stamp duty surcharge on the purchase of UK investment properties by non-resident overseas buyers and it will come into effect on April 2021.
But still, there will be no other changes to any stamp duty for the mainstream housing market. Chancellor Rishi Sunak made an announcement in his Budget confirming that £650m in which the surcharge will be raise and directed to help almost 6,000 rough sleepers into permanent accommodation. Other measure which may affect agents includes:
- Pick Pay Refunded by Government in Full:
For any staff member of agencies and all firms with not more than 250 employees who got sick because of corona virus will get sick pay refunded by the government for up to 14 days. - Business Rates:
Retail operators with ratable value under £51,000 will be abolishing this year. Other business will get £3,000 cash grant, agents are advised to consult their local authorities to check if they are qualified - Long-term future of business rates:
A review of long-term business rates will be launch at an additional Autumn Budget later this year. - 4G Coverage:
95 percent of the country will have 4G coverage in the next five years. - A planning white paper announced Thursday March 12
- An extension of the Affordable Homes Programme with a new multi-year settlement of £12 billion.
- Infrastructure Spending
In addition to a £30 billion emergency package of spending and grants this year to counteract corona virus, there will be an extraordinary increase in infrastructure, adding up to some £175 billion over the course of the current parliament, before general election in 2024.
Agents and other industry figures have expressed disappointment at the stamp duty surcharge, for some relief there have not been further fiscal attacks on the housing sector.
"Overseas buyers tend to purchase properties in prime central London which are completely unaffordable to most homebuyers anyway.
Therefore, this move will not help those that need it most. Ultimately, by energizing surcharges, it is likely that purchasers will factor this additional cost into any offers they make on a property so prices may be pushed down in areas where overseas buyers are purchasing"
"Treasury should stop tinkering with stamp duty and introduce tax incentives for landlords to encourage them to sell to tenants" - says Winkworth
"Stamp duty is a real negative for the property market as it discourages people from moving, particularly downsizers. This has a knock-on effect on the flow of employment, which is bad news for businesses trying to recruit, especially in London and other major cities.
A better route would be to encourage property investors to sell to tenants by offering capital gains incentives. Currently, an investor who sells a rental property is liable to pay capital gains tax at 28 per cent on any profits they make, which is a big disincentive to selling up. If tax relief were introduced, the tenant could also benefit, by receiving some of the proceeds as a mortgage deposit"
Tom Bill, the head of London residential research at Knight Frank, comments:
“The introduction of a surcharge for overseas buyers will bring the UK into line with many other global property markets. Attempts to ease affordability pressures in the wider housing market should be welcomed, although the new measure will need to be monitored carefully to ensure there are no unintended consequences, including for the forward-funding of new-build developments. Furthermore, a wider re-thinks of stamp duty rates are still needed to increase housing market liquidity and maximize any stimulus the government plans to provide to the UK economy.”
"Relieved that the Chancellor has largely left SDLT alone. The two per cent surcharge for non-resident buyers is digestible - look at the property taxes they pay elsewhere"
said by Stacks Property Search, a buying agency, on Twitter.
"An additional two per cent stamp duty surcharge for overseas investors will certainly have an impact on the demand for properties in England's major cities. We will have to wait and see whether disincentivizing overseas buyers causes a shortage of rental homes in the long-term. Changes of this type – and reduced competition from overseas - would encourage more domestic landlords to invest in further properties and provide more homes for the growing tenant population"
added by Neil Cobbold, chief sales officers at PropTech Company PayProp.
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