The Autumn Budget was a mixed bag for landlords and whilst some hoped there would be concessions, many anticipated the additional taxation of private landlords and that didn’t come to pass either.
At budget time the Chancellor tends to like to pull something out of the bag at the end that everyone can get behind. This year that headline grabber was property related. The Chancellor announced the government will permanently raise the price at which a property becomes liable for Stamp Duty Land Tax (SDLT) to £300,000 for first?time buyers to try to help young people buy their first home. The relief will not apply to purchases of properties worth over £500,000.
It’s likely we will see some house price increases off the back of the changes to stamp duty rules. Whilst there has been a commitment to building 300,000 new homes a year, this won’t happen until the mid-2020s, so there is an opportunity for some heat to return to the housing market in the short to medium term.
The Office for Budget Responsibility (OBR) has predicted the changes in Stamp Duty thresholds for first-time buyers will likely push up houses prices by around 0.3%, suggesting this will benefit property owners more than first time buyers. Whilst most landlords won’t feel the impact of this change, this could benefit those landlords who are currently looking to liquidate an asset.
Private landlords who are selling property that has increased in value, or which they have owned for some time will benefit for the deferring of the introduction of the 30-day payment window between a capital gain arising on a residential property and payment.
The personal allowance for income tax will be increased from £11,500 to £11,850 from April 2018, while the threshold at which you pay a higher rate of income tax will rise from £45,000 to £46,350.
Fortunately, the government will continue to allow unincorporated landlords the choice to use either the government’s fixed mileage rates or actual vehicle running costs and capital allowances when it comes to calculating deductible motoring expenses.
The government is keen to encourage owners of empty homes to bring their properties back into use. To help achieve this, local authorities will be able to increase the council tax premium from 50% to 100%. However, this will unlikely impact landlords as authorities will only be able to charge 100% extra council tax on properties that have been empty for two years or more.
Whilst the private rented sector had called for tax breaks for landlords offering longer-term tenancies, the government announced it would simply consult on the barriers to landlords offering longer, more secure tenancies to those tenants who want them.
The government will bring together public and private capital to build five new garden towns and this is likely to provide great opportunities for larger landlords who wish to invest in such schemes.
Landlords in areas where private rents have been rising fastest and who have DSS tenants should be relieved to hear there will be additional support for Housing Benefit and Universal Credit claimants. This will increase the housing benefit awards of approximately 140,000 claimants in 2018?19, by an average of £280, in areas where affordability pressures are greatest.
Landlords, on the whole, can breathe a sigh of relief following the budget announcement, as they’re not being portrayed as villains of the property market, with the Chancellor preferring to focus on other areas of the UK’s housing market.
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