Individuals affected by property changes

A number of Budget measures will impact on the residential property sector for individuals.

Stamp duty land tax (SDLT)

First-time buyers will benefit from SDLT being abolished on houses costing less than £300,000. They will also not pay SDLT on the first £300,000 on homes worth £500,000 or less. This measure will be welcomed by first time buyers, but will only be worth at most £5,000. At a cost of over £3bn over the next five years, will first time buyers just end up paying more for their new homes?

Moreover, unless homes are freed up by existing owners moving up the property ladder, new properties will need to be available for these first time buyers to acquire.

Building homes

Financial support for house building has increased to at least £44bn over the next five years. The government has committed to building 300,000 each year. Measures will be introduced to release land with planning permission.

Stamp duty land tax (SDLT)

The SDLT filing and payment window on residential properties is to be reduced from 30 days to 14 days for transactions taking place after 1 March 2019. Given lawyers typically hold monies on completion to pay this liability, this may not impact too much on purchasers.

Non-resident landlords (NRL)

From April 2020, rent receivable by non-resident companies will be subject to corporation tax rather than income tax.  Although the rate of tax will by reduced, the corporation tax regime is more complex and, given interest restrictions, could result in higher tax charges. 

This measure could result in investments in the UK becoming less viable, both from a commercial viewpoint and due to the need to navigate through increased regulation.

Annual Tax on Enveloped Dwellings (ATED)

As expected, ATED charges are to rise by 3 per cent in line with CPI. This will impact those individuals who own UK residential property via a company for their own use - typically non-UK resident individuals and their families.