September’s mini-budget announcement plans set out by the new cabinet under the new Priminister, Liz Truss, are set to shake up the property market massively.
The announcement from the new Chancellor of the Exchequer, Kwasi Kwarteng, about September’s “mini” budget sees a massive swathe of tax cuts and reformatory across multiple sectors in Britain, with property development set to benefit massively from these changes.
From tax relief for both residential and commercial buyers, to relaxed regulations on land development and accelerated planning permission approvals, read on to see how September’s mini-budget announcement can benefit you.
Changes to Stamp Duty tax
Whilst many of the other changes announced within the mini-budget are just plans, for now, currently having the finer details hashed out, the Stamp Duty on property purchases comes into effect immediately.
Commercial Stamp Duty
Under the new plans for commercial purchases announced by Mr Kwarteng, there will be a ground-breaking 0% Stamp Duty* on purchases of land and buildings for commercial or new residential developments.
*The only “catch” is that these Stamp Duty reductions will likely only apply within the newly announced “Investment Zones” (more on this below).
Residential Stamp Duty
As for residential properties, Stamp Duty will no longer be paid on properties up to the value of £250,000, which is double to the previous scheme which was set at £125,000.
Furthermore, first-time buyers can benefit even further with an increased Stamp Duty exemption; originally set at £300,000 and now £425,000, and also a new tax relief increase originally set at £500,000 and now £625,000.
The new scheme will be set out as follows:
- 0%: £0 – £250,000 for non-first-time buyers
- 0%: £0 – £425,000 for first-time buyers
- 5%: £250,001 – £925,000
- 10%: £925,001 – £1,500,000
- 12%: Over £1,500,001
With Mr Kwarteng expecting around “200,000 more people” to be taken out of paying Stamp Duty and the majority of Britain’s buyers now holding more of their tax-saved liquidity when purchasing a residential property, the housing market is expected to become extremely busy and eager to buy.
Investment Zones
Whilst the stamp tax changes are sure to get more buyers on the market, one of the biggest changes property developers can look forward to is the announcement of “Investment Zones”.
Looking to liberalise planning restrictions and streamline the process of planning permission, Mr Kwarteng mentioned that they are currently in discussion with “nearly 40 places like Tees Valley, the West Midlands, Norfolk and the West of England to establish Investment Zones”.
With sites all across the UK – this is looking to be a nationwide scheme to help fulfil the government’s “Levelling Up” agenda.
Whilst the exact nature of these deregulations and incentives are yet to be released by the government, in addition to the Stamp Duty relief, here is what has been confirmed so far which is expected to apply for the next ten years within designated Investment Zones:
- An initial 100% business rates relief on newly-occupied or expanded premises
- Accelerated tax reliefs for structures and buildings
- 100% tax relief on qualifying investments in plant and machinery will not fall to £200,000 as planned but remain at £1,000,000
- If there’s a new employee, the employer will not need to pay any National Insurance on the first £50,270 earned, as long as the employee works on site for at least 60% of their time
Currently, these Investment Zones are limited to England only, however, there are plans to expand this scheme, if successful, within Scotland and Wales too.
What this all means for buyers
With multiple incentives for both residential and commercial buyers, and forecasted deregulations to planning regulations and permissions, there has never been a better time to consider investing in property.
Whether you’re an established company or looking to get your foot in the door, Barney Estates & Auctioneers are here to help you find the right solution for your needs. Get in touch today.
This article is purely speculative and should not be mistaken for financial advice. Readers should consult a professional independently before making any financial decisions.