What the 2016 Budget means for the Property Industry
Given the changes to the property industry over recent times, you’d be forgiven for thinking more drastic changes would be announced in the 2016 Budget. In fact, Wednesday’s budget wasn’t quite as dramatic as previous years and, so far as the property industry is concerned, it’s business as usual.
In the Autumn Statement, buy-to-let landlords received a bombshell – a new 3% stamp duty charge and a restriction of interest relief. Today saw relatively mild changes, and we’ve outlined the main ones below:
Commercial Stamp Duty Shakeup
Following the residential stamp duty reform that abolished the much reviled ‘slab’ structure, 98% of home buyers are now paying less, and those looking to buy commercial property will also benefit from a similar change.
There will now be no stamp duty payable on purchases up to £150,000, only 2% payable on any amount that falls between £150,000 and £250,000, and 5% on any amount over £250,000. This came into effect at midnight on the day of the budget, with transitional rules applying to transactions that are currently in progress.
Surcharges Made More Clear
George Osborne also took time out in the Budget to clarify the rules regarding the stamp duty surcharge on second homes and buy-to-let properties. Not only will it go ahead at 3%, but it will also apply no matter how many properties the purchaser is acquiring. Previously, there was some speculation that it may not apply to those purchasing 15 or more properties in one go, but that is not the case.
For those who own more than one property and are moving house, there will be a little bit more flexibility. If you are replacing your primary residence, you’ll now have 36 months instead of 18 to sell your previous property and claim a refund on the 3% surcharge. This move is designed to take into account any delays that could happen with the sale. If you run an estate agency, that could mean a little less pressure on finalising those completion dates.
