Chancellor Kwasi Kwarteng has announced that stamp duty will be cut.
In future there will be no stamp duty on the first £250,000 of a property purchase, instead of £125,000.
First time buyers will only pay SDLT on homes over £425,000, up from £300,000. First time buyers' relief is available on properties up to £625,000, up from £500,000.
No change has been announced for additional property SDLT surcharges.
These changes apply to England and Northern Ireland and take effect immediately.
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Next year’s planned increase in Corporation Tax is cancelled - this will therefore remain at 19 per cent, the lowest level in the G20 economies.
From April 2023 the basic rate of Income Tax will be cut from 20p to 19p. The government will also at that time scrap the 45p additional rate completely "to attract global talent and incentivise employment."
Kwarteng says the past approach of governments, increasing taxes to a 70 year high, will not be continued. Instead, via tax cuts, a trend rate of growth of 2.5 per cent per year is Truss government objective; this will turn ‘vicious cycle of stagnation’ into ‘virtuous cycle of growth.’
In terms of property and related issues, Kwarteng has also announced:
- There will be long term reform of the planning system outlined by the Levelling Up and Housing Secretary in the coming weeks. A new Bill will “unpick planning restrictions” with “streamlining” of processes. To boost housing supply, there will be an accelerated release of government-owned land;
- In the shorter term, specific Investment Zones will be identified for faster development with tax reliefs up to 10 years, and no stamp duty for some commercial and job-generating businesses in those areas;
Kwarteng says there are three priorities for the government:
- Reforming supply side of economy;
- Responsible public finances;
- Cutting taxes to promote growth.
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Other specific measures announced today include:
- Incentives for those out of work to return to the labour market, or risk reduced benefits;
- Minimum service levels, by law, to reduce strike action in key industries;
- Pension fund investments will be unlocked to allow investment into targeted growth projects;
- Bonus cap for City bankers scrapped;
- Enterprise Investment Scheme and Share Option plans will be enlarged;
- Office of Tax Simplification wound down, with the process devolved to all departments;
- Guarantee that Bank of England financial independent will be maintained;
- VAT-free shopping for overseas visitors;
- Planned duty rate increases for alcohol will be cancelled;
- National Insurance increases proposed for 2023 cancelled, as announced earlier this week, without reducing spend on HNS and social care services;
Kwarteng has also released details of the government’s already-announced energy intervention:
These will cost some £60 billion for the next six months, involving multiple steps:
- Household energy price guarantee, limiting household bills for the next two years to typically £2,500 per year; Existing plans to give £400 off bills for all households this winter - more for vulnerable individuals;
- Price guarantee for all businesses equivalent to that of households;
- An Energy Market Finances scheme, giving 100 per cent guarantee to banks to offer liquidity loans to energy suppliers.
- Combined, these energy measures will drop inflation by circa 5.0 per cent.
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Well one good thing (at last) this presumably cancels the effect of the S24 tax swindle. ie we won't be pushed artificially into the higher rate tax band, because there won't be one from April 2023.
We will continue being artificially pushed into 40%
Cancel that, its only the over £150K people
Anyone know if btl will also enjoy no stamp duty? Or will LL be penalised again?
I think we know the answer there Wendy, the last property I bought, 2017, was £74k, still had to pay landlord stamp duty on it though
New rates apply to everyone, but additional 3% remains.
BTL will not benefit from this new Stamp Duty proposal. FTB's only!
This won't help tenants as there will be more demand from private buyers. Suits me though as I am shortly placing an ex rental property on the market. An ideal 1st time buyers property which may well go up in price now though.
Ditto here. I've got a few to stick on right now during my downsizing operation. Hopefully keep the sales market a bit more buoyant for longer with the interest rate/ cost of living drag kicking in.
As for my remaining tenants the enjoyment of my well below market rents are going to have to be pushed up. Government policy over last 7 years has forced push to go to shove
Ditto here as well, both with selling and putting up rents. Shame the new PM was not brave enough to get rid of section 24
This will stir FTBs into a frenzy yes, but if there is little to buy or chains remain open for ever, it's all pretty meaningless, whilst house prices at the lower end get heated up at the same time. Developers will be rubbing their hands though, and putting their prices up 5% this afternoon.
If you wanted to get the market moving you should have reduced rates across the board (which are fundamentally too high anyway) to stimulate activity in the whole market, so sellers are teased out of their cost of living bunkers with the prospect of a discount as well.
This helps the first time buyer in the same way that thalidomide helped new born babies.
The easiest way to increase supply would be to lower CGT to encourage landlords to sell some houses.
How many of us bought when taper relief existed and had a long term plan of retiring one day?
Other countries such as France have a taper relief which results in zero CGT after 22 years.
I can remember those days Jo taper relief and indexation, that was the fair way of CGT
Been at it since 1992 so remember taper relief (as well as index linking) very well.
The forever moving goalposts against the landlord nicely in play
Same in Germany after 10 years, they then get taper relief.
I haven’t had time to digest this Budget yet, from I heard so far didn’t see anything to help private sector landlords who are the main players in this providing quality affordable housing, very strange to ignore the most necessary and important individuals putting a roof over 8’000’000, heads and contributing billions to the economy, off their back with their own finance, not public purse and branded Rogue’s & Criminals some gratitude.
Micheal, the devil is in the detail, which l expect to be published shortly.
"private sector landlords who are the main players in this"- sorry, main players in what? The economy? Cos that's what the budget is about.
"very strange to ignore the most necessary and important individuals" - who's that then? Farmers? Medics? Builders?
Hi House Martin, the main players in supplying Private Property to House millions of people, do you not also understand that no more than the Government that caused all those housing problems by endless full scale attack on us. They used never have anything to do with us, some years back the Government made a decision to take control of all private property we weren’t even told or asked it must be Democracy, but when they had destroyed public Sector Housing no more damage could be done there they moved on to us. This is why you have this stupid Budget borrowing billions trying to buy their way out which will be a bigger problem to pay back, a loan to pay for the loan you couldn’t pay for in the first, we only just finished paying back for last last war. Yes there are Farmers, Medics, Builders, Shopkeepers, Working individual’s who are prepared to take the risk and to put their money where their mouth is. Also Retired Teachers that don’t deserve a mention or the politicians with huge Portfolios like a Previous Prime Minister, but in the main the bulk are owned by ordinary individuals with a couple of properties to supplement their retirement given that savings interest was abolished leaving them with no option.
Landlords do not "provide" housing - that's the job of housebuilders and renovators. Landlords facilitate a particular type of occupation where the occupant is either not wishing to purchase, can't afford to or is denied the ability to even if the monthy funds avaiable to pay the profit-loaded rent would be more than sufficient to cover a mortgage on a similar property often in much better condition. There is an element of exploitation of an opportunity at the expense of the impoverished, just like the providers of pricey pay-day loans who I'm sure think they too are more vital to the economy than farmers, medics, builders, and yes, teachers.
Supplementing one's retirement at the expense of others now not being able to provide for their own retirement does not contribute to the economy in a particularly healthy way. It should come as no surprise then that recent Governments have become less and less sympathetic to landlords.
‘ Profit loaded rent’
So by your logic tenants should really be paying mortgage figure only to Landlords.
Who pays for house maintenance, EPC improvements, selective licence so called improvements , boiler maintenance, council tax when void, elec/gas standing charge when void, section 24 tax on turnover? That would be ???
Martin, most landlords are builders or renovators, I have never bought a 'turn key' property, even my own homes have been renovation projects, so a builder might renovate a property then sell it on for a profit, a landlord would rent it for a profit, where's the difference in that ? Profit is an ugly word to those too bone idle to work for it
Micheal Foley
Correct,plus the PRS sector is a massive private enterprise success story, housing millions of people, often people who can be feckless rogues. So big business is mounting an unpaid takeover, which will end up with another sub prime type crisis. Crazily this Government is borrowing money to pay peoples gas bills !
HouseMartin, my friend that’s a bit of a sweeping statement, maybe you are confusing us with Shelters Alecia, Generation Rent or Michael Gove even Eddie Hughes the so called levelling up brigade.
I bought my first Plot of land in Ealing in 1972 subsequently built the Detached House which was built by my own hand, with only hand tools, no electric on site and cordless wasn’t invented, completed in ‘73, incidentally it was the first house I let, would you not call that providing homes, then built 2 detached in Croydon in ‘78 another detached in Action in ‘85 another in Ealing ‘10 those were all provided by me. I bought others you don’t count them apparently.
The idea you can buy property and pay for it with money equal to rent is a bad joke, I have 5 shares paying £1600. pm so are the 5 going to buy same property between them not likely even if they did it wouldn’t near covering the Mortgage.
None of my Tenants exploited or impoverished and very happy to have me for a landlord. The business for me unlike others was never to supplement my Pension. I always worked for a living so I was not dependent on supplementing my Pension which is just as well it’s taxed @ 40% disgraceful there should be some element of Pension fee of tax instead of lumping it all in together for income tax.
Yes, I would most certainly agree that building or renovating a house is "providing" housing. Landlording subsequently is a different thing entirely.
I would tentatively put forward the idea that tenants of a profitable HMO could lump together and buy out their landlord and then save money but the mechanism is simply not in place to make it easily feasible.
They could all save for the deposit buy the house under a joint mortgage. Then again this would possibly mean some sort of discipline in their expenditure. Yeah be a bit of an affront to put that to them I suppose
This is getting more daft this in tantamount to confiscation, are you suggesting there should be no landlordism or letting.
No hope of 5 individual Sharers buying together (forget about HMO’s one in every room incl’ living room) as they come and go frequently which is the why they are renting, it’s difficult enough for a married couple to stay together.
Maybe don’t bother to buy a house just give me one now that’s much better.
I find the British culture of looking at rich people and then saying they shouldn't be rich, how can we bring them down to my level with increase taxes etc. very sad. I have seen other cultures who look at rich people and say, I am going to work hard and be like them.
The story of the company boss driving past the workers in his Rolls-Royce, and the workers saying they hate him. In other cultures, they say I am going to work hard and have 2 Rolls-Royce's
I find the UK culture of having one of the highest gini coefficients in Europe very sad - not from some theoretical standpoint, but because of the awful society it creates. You can’t buy most public goods with private wealth.
Agreed, as a school boy in the 60s we used to look up to the successful man and aim to be like him, that's why many of us baby boomers done well, present generations look at successful people with hate, bitterness and envy , that's why few will ever be successful, their lose
John, that's not part of British culture, tends to be more volatile races who are, However we have a glaring example of feckless and lazy people on our German Royal family. Prince Phillip was a pauper when he came here and died a wealthy man, never having had a proper job,apart from a stint on the Navy.
" Jahan Khan
‘ Profit loaded rent’
So by your logic tenants should really be paying mortgage figure only to Landlords."
What I'm saying is many tenants could service a mortgage if they could only get over the deposit hurdle. Paying a rent loaded with profit and increasing over time along with house prices themselves denies many renters the ability to save up a deposit. It's a poor system where someone could be locked into renting the same property for decades, effectively buying it outright for the largely passive landlord investor who did a bit of renovation work many years ago and now has to do very little whilst the tenant works 40 hours a week and pays over a good third or more of their hard-earned income without having any security or any share of the capital gain and has no surplus income left to put towards a pension of their own. That is a truly dreadful system.
"Andrew Townshend
Profit is an ugly word to those too bone idle to work for it"
So working hard for a few hours or weeks once only to renovate a particular property and then deriving a lifetime of almost passive income thereafter is somehow a noble form of "working hard" but working 40 hours a week to pay the rent for years on end is tenants being 'bone idle' is it? " That kind of attitude to tenants, who are after all the life-blood of this supposed "massive private enterprise success story", could be seen as extremely offensive.
If you're referring specifically to tenants in receipt of benefits you are left with the inescapable conundrum that a mostly passive landlord is effectively having his mortgage paid for by the tax-payer. If his benefit-claiming tenant is "bone idle" what then does that make the landlord?
For most of my working life I worked far more than 40 hrs a week, now at 69 that is reduced but often adds up to more than 20 hrs a week, further more none of my income comes from the tax payer as I refuse, on princible, to rent to scroungers on benefits
It's irrelevant if one also happens to work 40 hours at something - the point is the landlord is not working 40 hours a week towards that one property like the tenant is, yet the system allows him, not the tenant, to derive all of the profit. There's an imbalance in a system like that.
Sorry Martin maybe I didn't make it clear being a landlord was not my only job I spent 30 yrs self employed in the motor trade
HouseMartin, If it is so easy to make money being a Landlord, why don't you just become a Landlord and enjoy all that easy money, instead of moaning at Landlords.
House Martin come on now that’s exactly what the LL with another job is doing he is working to supplement the Mortgage. Do you think a buy 2 let will pay for it self not a hope, the figures are always inflated to get the loan /fraud courtesy of the lender.
Just to re-cap you think one of my Terraced houses for example lowest value in outer London £550’000 and you think the 5 Sharers now paying £1’600. pm in rent
would cover a Mortgage on this, stop it. Who ever wrote THE WHITE PAPER must be of same school of thought.
It not about point scoring on here against one and other this is too serious a business to be flippant about it.
I respect your point of view and wish you well. Good evening.
If someone wants to buy a property bad enough you can find a way. I think most renters do not want to buy. If the problem is the deposit, what happened when we had 100% mortgages, we still had renters.
There are lots of ways to get round the deposit issue, family mortgages, first time buyers help, housing association, part buy part rent schemes, etc.
You can start with a small cheap property and gradually work up. People renting don't want to move to a smaller property.
Agreed John you have to go out and make these things happen, and anyone CAN do it if they really want to
Agree except Part Buy Part Rent / shares ownership disaster non starter, you’d be bet off renting off anyone rogue’s or not.
House Martin is playing a dangerous game ! Probably associated with the legal profession, listing after all the legal aid for Victims! Everything you buy has to pay for the sellers mortgage or finance. Crazily the government is borrowing money to pay for the gas bills !?? All taxpayers have to pay a Substantial amount to pay the interest on Government debt. Most PRS landlords subsidize the tenant with free labour and end up paying a disproportionate amount of VAT, especially if using a letting agent !
Martin has his views I don't mind reading them or replying to them, maybe he works for Shelter, and maybe he doesn't work at all
Spell checker turned lusting into listing !
Would be interesting to see what value to ‘society’ this type of whinger gives compared to what we do. I sleep easy at night knowing I provide value
Andrew, they aren't views, l think they are part of a business proposal, from sue,grabbit and run ! Perhaps the real House Martin should come down from the eaves and enlighten us.
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