The Budget 2018 & The Property Market
7th November 2018
The Budget was a little light on content in relation to property and landlords, but there are some key headlines which are useful. There were no big changes to Stamp Duty which were rumoured such as encouraging down sizers to move by cutting SDLT to free up larger properties for those looking to move up the housing ladder.
There was also discussions surrounding the extra stamp duty imposed on landlords and whether this would be increased, this also did not materialise. There was also no pull back on the stamp duty paid by landlords and additional home purchasers.
Help to Buy
There was a move towards an exit route from a scheme that has been in operation for over a decade by the time it ends. The good news particularly for developers and builders is that the current scheme will be extended until 2021 providing some degree of certainty.
The outline of the new scheme is only due to run from 2021-2023 and will be purely be for first time buyers to take advantage of. The current version is open to all and will be subject to house price caps dependent on the region where the purchase is made.
Non UK resident charges
Non UK residents were exempt from tax on any gains that were made on UK property. This was changed in April 2015 affecting gains arising from residential property. As previously announced the scope of tax on gains will be extended to non –residential UK property with effect from 1st April 2019.
Payment of tax on residential property
From 6th April 2020, all CGT due on UK residences will become payable with in 30 days of completion, whether the disposer is UK or foreign resident and whether or not they are already within Self Assessment.
This ‘payment on account of CGT’ will only apply if a chargeable gain arises, so it will affect the sale of an exempt main residence. It will affect the tax payable on the sale of a buy-to –let or furnished holiday letting, and it will significantly advance the payment of the tax. For example the CGT on a sale exchanged and completed on the 6th April 2019 will be due on 31st January 2021: the tax due on a sale completed on 6th April 2020 will be payable on 6 May 2020.
Stamp Duty Land Tax – First time buyers
First time buyers are exempt from Stamp Duty for purchasers up to £300,000. This is being extended to shared ownership properties valued at up to £500,000. The exemption will apply to the initial share purchased up to £300,000 (any excess over that figure will be charged at 5%. This relief is being backdated to the introduction of the original first time buyers’ relief on 22 November 2017.