Chancellor Rishi Sunak’s Spring 2021 Budget, announced on 3 March 2021, has given the property market two major shots in the arm, in relation to stamp duty and mortgage availability.
But what else was announced that will impact the property market? We look at the seven key takeaways for estate and letting agents.
The stamp duty holiday for homes purchased for under £500,000 has been extended to the end of June.
After that, properties valued up to £250,000 will be stamp duty exempt until the end of September.
Properties over this amount will be stamp duty-exempt on the first £250,000. From 1 October 2021, normal service returns – that is, stamp duty applying to properties over £125,000.
A new Help to Buy scheme will be introduced on 1 April 2021 to support first-time buyers who have only a 5% deposit.
This will go some way towards addressing the ongoing limited supply of high loan-to-value products in the mortgage market.
Corporation tax is to rise from 19% to a whopping 25% from 2023 onwards for businesses with profits greater than £50,000 a year.
Those with profits less than 19% will pay the current 19%, which will then taper up to 25% by 2023.
New tax breaks have been announced for companies in financial difficulties.
Companies shouldering losses of up to £2 million will be able to offset new tax breaks against future tax bills.
The Treasury also announced a new allowance for companies to invest in capital equipment. The new scheme will enable firms to claim up to 130% of their investment cost against tax.
Sunak didn’t increase the Capital Gains Tax (CGT) rates, as many had anticipated. Instead, the Chancellor promised to maintain the current level until April 2026.
It will remain at £12,300 for individuals, personal representatives and some types of trusts, and £6,150 for most trusts. This could help stem the number of landlords moving out of the property market.
Recent Zoopla data had shown movement in the market from landlords, potentially acting before the new tax regime kicked in.
There was also good news for estate agents on business rates.
The government will continue to provide agents and other eligible retail premises in England with a 100% business rates relief until the end of June. This represents a three-month extension on the original scheme.
This will be followed by a 66% business rates relief from 1 July 2021 to 31 March 2022, capped at £105,000 per business.
“We have endured an extraordinary financial situation during Covid,” said Sunak. “I am seeking the best way to fix our significantly damaged public finances fairly.”