Residential property

The Chancellor announced a number of measures which will again impact on the property industry, these include:

A three per cent SDLT surcharge for buy-to-lets and second homes from April 2016. This may create a mini purchase boom over the next four months. The measure is aimed at both individuals and companies. Relief will be available for significant investment portfolios but as this is suggested to be 15 properties or more, a number of smaller investors will not benefit. With this on top of the restriction on interest relief announced in July, will smaller investors be pushed out of the market?

Consultation will take place on bringing forward the filing and payment date for SDLT from 30 days to 14 days after completion. This is proposed to be introduced in 2017/18. Given funds are normally deposited with solicitors on completion, the measure should not impact on property owners.

The SDLT changes will not apply to Scotland which has its own Land and Building Transaction Tax. There is a possibility that a similar change may be announced in the Scottish budget on 16 December.

From April 2019 CGT will need to be paid within 30 days of a residential property sale. The measure will bring forward payments by up to 21 months and require vendors to be better organised by having information available to calculated gains on disposal. The payment date will not apply to qualifying principal private residences.

A special London Help to Buy scheme is to be introduced to offer interest free loans worth up to 40 per cent of a newly built home with a purchase price of up to £600,000. This may encourage the building of 'more affordable' London properties.

Small Business Rate Relief is to be doubled and extended for a further year from 1 April 2016. The measure will be welcomed by small businesses.

As announced at the previous Budget, an additional round of Enterprise Zones (EZs) has been announced. 18 new zones will be created including 15 in smaller towns and rural areas, with a further 8 previous EZs being extended. The changes will come into effect from April 2016.

Where a company (but not a property business) is based in an enterprise zone tax relief at 100 per cent allowance is available to companies installing plant and machinery. The new or extended EZ’s that will attract the 100 per cent allowance are noted below:

  • Infinity Park Extension Derby
  • Humber EZ
  • M62 Corridor EZ
  • Luton Airport EZ,
  • Cheshire Science Corridor EZ
  • Carlisle Kingsmoor Park EZ
  • Hillhouse Chemicals and Energy Enterprise EZ, Fylde
  • Stoke / Staffordshire Ceramics Valley
  • Cornwall Aerohub+
  • North East Round 2 EZ

New EZs will also open in Cambridgeshire, Hertfordshire, Aylesbury Vale, Didcot and Greater Anglia, among others, but they will not attract the 100 per cent tax relief available on plant and machinery expenditure. Instead there will be a business rate discount of 100 per cent, available for the first five years.

If you would like some advice the topics raised in this article, please contact Adrian Benosiglio, Melanie Reed or your usual RSM contact.