Local agent Allan Fuller looks at the Budget this week and how it affects Property
Just when everyone expected no surprises the Chancellor popped a rabbit out of the hat in the form of a major pension change for those age 55 and over giving them the option to withdraw their pension pot as a cash lump sum and not have to buy an annuity, and then use the funds in any way they wish. Wags are suggesting that Ferrari and Lamborghini sales could soar! However I am sure people will be very sensible and undoubtedly many will consider buying property. The dual expectation of income from rent and capital appreciation when property values rise is always an attraction and we have a considerable number of investors who have proved how successful property has been for them. Another consideration is that an annuity stops at when someone dies, property can be passed on by inheritance.
Hopes of a change to the Stamp Duty tax when buying property were dashed, it was always extremely unlikely, change is overdue because the bands are unfair and it is a tax that certainly should not be so high for first time buyers, but we will probably have a long wait to see anything altered. Where there is a change however to Stamp Duty is for residential properties bought by non-residential persons, from 20th of March the rate is 15% on property over £500,000, previously the level was £2,000,000.
There is still awaited changes to Capital Gains Tax on disposal of residential property by non-resident owners, the Chancellor confirmed that this will be announced soon.
The Chancellor also announced the creation of a £500m Builders Finance Fund that he plans will create 15,000 new homes, £150m Right To build finance for people wanting to build their own homes, and the development of a Garden City in Ebbsleet in Kent to provide 15,000 homes, he also mentioned further reform of the planning system.
These are the broad implications of the budget, there are many details that need to be considered and for personal financial advice and any tax matters I recommend consulting a qualified accountant.
So overall a Budget that was positive for property, we always hope for more but given how much the economy and the property market particularly locally has recovered we have much to be thankful for. If anyone would like to discuss how they could benefit from any of the changes do not hesitate to get in touch with me .
March 21, 2014