Lucy Mangan – Property sector specialist
The UK’s property and construction sector needs stability and incentives, not more tax increases
The past seven years have bought punitive tax measures that have impacted the property and construction sector, a clear period of stability and tax incentives is very much required to support house-builders and take the pressure of B2L landlords, many whom are sitting on stock that they would prefer to sell. The sector needs a helping hand from the Chancellor sooner rather than later.
With Brexit uncertainty still negatively impacting property sales and significant housing shortages evident across the UK, the Government needs to do more to get the housing market moving. While it won’t be an easy task to achieve, some small changes could make a big difference.
B2L property investors are in need of an ‘escape hatch’
Landlords have taken the brunt of many of the recent tax changes.
A temporary reduction in the rate of Capital Gains Tax (CGT) payable on gains from the sale of B2L properties, made unprofitable by recent tax changes, could help to release stock onto the market. The new 30-day payment rule for CGT also means the Treasury’s coffers would feel the financial benefit immediately.
Stamp duty land tax
Stamp duty land tax (SDLT) might see a wider consultation as to its structure, but we don’t anticipate any major changes in the forthcoming Budget. Whilst reductions in stamp duty land tax at the higher end of the market would be welcome, it is unlikely this would be seen as a good move politically.
Further housing changes could see the SDLT threshold raised to £500,000 for all buyers, the introduction of a 3 per cent SDLT surcharge for non-UK resident buyers of UK property.
Incentives for developers and construction companies?
Tax incentives could be put in place by the Government to help build more homes are the lower end of the market, whilst meeting certain environmental targets. This would encourage affordable developments, future-proof homes whilst passing on saving to the buyers.