The Spring Budget was announced on 3rd March 2021 by Chancellor Rishi Sunak. We have highlighted some of the changes that will impact the property sector and will be of interest to you.
A three-month extension to the temporary cut in Stamp Duty Land Tax in England and Northern Ireland until 30th June 2021. It will then taper off, applying to the first £250,000 until the end of September, before returning to £125,000 at the beginning of October. This will support the housing market and protect and create jobs.
Coronavirus Job Retention Scheme
Coronavirus Job Retention Scheme (furlough pay) being extended until September, meaning furloughed employees can still be paid. Many of these will be renting, so this indirectly benefits landlords to keep tenants paying their rent.
Mortgage Guarantee Scheme
A new mortgage guarantee scheme will enable all UK homebuyers to secure a mortgage of up to £600,000 with a 5% deposit.
Corporation Tax will increase to 25% to support the recovery; the increase will not take effect until 2023. Businesses with profits of £50,000 or less, around 70% of actively trading companies, will continue to be taxed at 19%. A taper above £50,000 will be introduced so that only businesses with profits greater than £250,000 will be taxed at the full 25% rate. This will have an impact on landlords that are operating in a company structure.
Personal Tax Allowance
The personal allowance will be frozen at £12,570 for the tax years 2022/23 to 2025/26.
My thoughts on this year's budget are mixed due to some great measures announced, yet some much-needed changes were missed out.
The stamp duty holiday not being extended would have caused a catastrophic fall through rate, so I am pleased common sense has prevailed. However, all good things must come to an end at some point, so no surprise on the small extension, and I believe this makes sense. Also, the lack of mention of reforming the capital gains tax allowance (that was anticipated) is good news for landlords, so let's hope this stays this way!
However, a solution to re-open courts to deal with the backlog of housing cases and to support investment in the private rented sector were both omitted – both of which are desperately needed.
If you are a landlord or property investor in Nottingham or Mansfield, we will be able to help you. You can call us on 0115 704 3163 or 01623 277115. Alternatively, you can email us via our contact us page – click here.
The author of this blog is our Managing Director Adam Kingswood; you can connect with him on LinkedIn.