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The Chancellor has used his Budget to confirm a 2p cut in National Insurance, from April 6. This will take it from 10 per cent to eight per cent.
But for the property industry the real interest is likely to be in the reduce higher Capital Gains Tax rate on from 28 to 24 per cent.
Jeremy Hunt has also confirmed, he is scrapping tax advantages which make it more profitable for second home owners to let out furnished properties to holiday makers rather than to long-term tenants.
Related to the housing market, at least in prime London, the Chancellor has also abolished so-called non-dom status - pledging to introduce “a system which is both fairer and remains competitive."
On more general housing, he has allocated £242m of investments in Barking Riverside and Canary Wharf - on London. Here, he says, nearly 8,000 homes will be built "as well as transforming Canary Wharf into a new hub for life science companies".
He has also announced:
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With continued frozen tax allowances he's fooling no one with the NI Cut.
As usual it's rearranging the deck chairs on the Titanic and will do very little for seaside and rural communities who will now see a drop in tourism due to the tax changes on Air BnB making it cheaper to fly abroad (economy only)...
Hunt obviously wants Landlords to sell up as he is reducing CGT! More money for theTreasury coffers. Goods news if selling up now. I have just missed the boat by selling 3 flats recently.
He is trying to trap us 🫣
I thought the reduction in capital gains tax was quite good, but it is awful that so many of us feel that we have to sell because we can't operate within the terms of the impending legislation.
Wouldn't it have been better to create rental reform which was acceptable to landlords?
Its all deck chair stuff. It was only 10 mins ago that NI had to go up to pay for social care and covid, national emergency etc and now its being cut to levels lower than that. Ditto CGT allowances, and now this. Noone can financially plan in this environment its like having Heath Ledgers Joker as the chancellor.
I'm sure Heath would have done a much better job.
I remember when Heath was the Prime Minister. Loads of strikes, power cuts, 3 day weeks ( and not just for the public sector).
Wilson and Callaghan followed with an IMF bailout and then a total ban on increasing prices and wages.
They made the current lot seem geniuses!
I thought Wendy meant Heath Robinson.
Robert, fair point, although not all "second homes" are as well occupied.
It is complicated by the fact that there are different types of holiday let's too. Some could revert to residential, some only have permission for holiday let's and could not be residential. Then you have those who have converted from AST to serviced accommodation. Maybe some of those would convert back if the tax breaks were taken away.
Only time will tell I suppose.
Ben Beadle, Chief Executive of the National Residential Landlords Association, says: “The Chancellor has once again ignored calls to revitalise long-term investment in quality rented homes in favour of tinkering at the margins for short-term gain.
“Increasing taxes on holiday lets and cuts to Capital Gains Tax will make no meaningful difference to the supply of long-term rental properties. Meanwhile, those reliant on housing benefits still do not know if their benefits will be frozen from next year or not.
“With an average of 11 tenants chasing every home for private rent, social housing waiting lists at 1.3 million, almost 110,000 households in temporary accommodation and the number of first-time buyers slumping, the Budget needed to tackle the housing crisis once and for all. What we got was a deafening silence.
“This was a missed opportunity to make providing new homes to rent and buy the priority it desperately needs to be.”
Am I reading this incorrectly? To me it reads more like a representative of Shelter than a Landlord Association.
I would say reducing capital gains tax rates and increasing taxes on holiday let's is more likely to encourage them to be sold than to return to the LTR market. Unfortunately, at the price levels they will be ripe for rich second home owners rather than local first time buyers. Those owners tend to spend less locally than holiday makers so there will also be knock on effects to local businesses.
It makes much more sense to incentivise LTR than to penalise holiday let's (which are completely different to "second homes".
I don’t think there will be many rich second home owners snapping up properties as they have to pay at least two times normal Council Tax. I have noticed properties in European holiday hotspots increasing in price. I imagine the second home owners are already investing abroad.
Ellie
As a second home owner who's second home is used frequently by our extended family I disagree. Since we're not paying any rent, we can spend more in local pubs and restaurants than renters can. We also spend more on maintaining our properties than local owners can afford.
Second homes and empty properties should not be taxed in the same punitive manner.
Robert, I think you are muddling me (Ellie) up with Emily.
Robert I agree with you. I did have a second home but did feel it wasn’t being used enough. From the sale proceeds did think of buying one abroad but as I am getting older figured I could enjoy a lot of luxury hotels with the money.
It was certainly underwhelming.
The commentators afterwards were interesting. A housing woman from Newcastle was absolutely gutted that nothing was done for housing.
The only mention the West Country seemed to get was the Cornish and North Devon MPs getting their way on messing up holiday lets.
On a positive note one of my sons will be about £5K better off due to the Higher Income Child Benefit change and NI. He's an exception though as he has 5 children and next year will earn best part of £60K.
Very few other people will get much.
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