March 2017 Budget: What It Means To Homeowners
The announcement of the annual budget is always a tense time of year, particularly for property owners, and in current times, with major political changes occurring on an almost daily basis, those looking to sell their property should be forgiven for feeling a substantial sense of trepidation. Here are some of the major points covered by the budget, as picked out by A1 Homebuyers.
The good news is that there has been no change to the current status of property tax, which means that the suggested transfer of this obligatory payment from buyers to sellers has not taken place. However, if you’re retired and are selling in order to downsize, the proposed tax exemption you may have hoped for has not been initiated either.
In an attempt to breathe a little life into the slumping housing market, the Chancellor has continued our previous government’s approach of creating or enhancing current assisted buying or save-to-buy schemes. The launch of the new NS&I Bond is something to take note of, as it means that buyers will receive a fixed rate of 2.2% on deposits of up to £3,000, with a maximum total interest of £202 available before tax is accounted for. The recently created Help to Buy ISA is still going strong and allows first-time buyers further tax-free interest along with a 25% bonus from the government upon purchase. Along with the brand new Lifetime ISA – to be used either for first time property purchases or upon retirement and allowing an annual limit of £4,000 with the Government contributing 25p for every pound saved – and the predicted rise of cash and stocks and shares ISAs following the increase of annual tax-free allowances from just over £15,000 to £20,000, it looks as though there will be a greater number of first-time buyers entering the property market this year.
It appears that the suggested plan to overhaul the Rent-a-Room scheme, which allows homeowners with a spare room to rent that space out for an amount of up to £7,500 per annum tax free is still being discussed, though this item was not covered in the budget.
The personal tax-free allowance is predicted to increase very slightly from £11,000 to £12,500, with a rise to £15,000 estimated by 2020. This is positive news for buy-to-let investors across the UK.
Despite confusion and controversy, nothing seems to have changed regarding the government’s approach to the 3% Stamp Duty surcharge on second homes. This surcharge still affects not only those with second homes or holiday homes, but also individuals with a share in another property so long as that share is worth more than £40,000. Campaigners are yet to witness any signs of the opposition backing down.
All in all, the few changes outlined within the budget are small. A major focus still lies on an attempt to pull the market out of a slump by encouraging and supporting first time buyers in order to instigate a knock-on effect. Any improvement in this area so far has been relatively slow, and, with a ground-breaking year ahead in the world of politics, it is difficult to predict the state of UK housing over the coming months.
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