The 2018 Budget

The impact on property

The 2018 budget was announced on 29^th October 2018.  There are a few points to note from a property perspective.

Business Rates

The budget contained proposals to assist high street businesses with support through the business rate system. The government is intending to cut bills by one third for retail properties with a rateable value above £51,000.00.  In the budget, the government’s view is this will benefit up to 90% of retail properties. This will take effect from April 2019 and is likely to last for two years.

The business rates discount is to be open to a wide range of retail properties, although there may be some significant exceptions. The reference to retail properties does suggest professional services are likely to be ineligible for the rates discount.

The government also announced “a plan for the high street” which includes a fund for future high streets together with some proposed planning reform to support local high streets.

Stamp Duty Land Tax

Stamp Duty Land Tax (SDLT) only applies to England and Northern Ireland. The first time buyers relief will be extended so that all qualifying shared ownership property purchasers can benefit from the first time buyers relief (subject to satisfying the criteria) whether or not the purchaser will pay SDLT on the market value of the property.  The change will apply to relevant transactions with an effective date on or after 29^th October 2018.  The relief will also be backdated to 22^nd November 2017. If you have recently purchased a shared ownership property in England or Northern Ireland it would be worth seeing whether you are eligible for a refund in respect of the first time buyers’ relief.

There is also a consultation announced for an additional SDLT surcharge of 1% for non-residents buying residential property in England and Northern Ireland.  Non-residents may wish to consider their proposed purchases in light of this consultation.

Home building

The budget announced continued support for the housing infrastructure fund.  The British Business Bank will deliver a new scheme providing guarantees to support up to £1 billion of lending to small to medium house builders. The housing infrastructure fund will also be increased by £500 million to a total of £5.5 billion to provide development finance to developers of all sizes.

There are some proposals for the government to introduce a simpler system of developer contributions. There are to be proposed reforms for the community infrastructure levy and the use of Section 106 Agreements. The proposals are yet to be finalised.

Help to Buy loans  

The government announced that from April 2021, a new help to buy equity loans scheme will run for 2 years before closing in March 2023.  The new scheme will be available to first time buyers only and eligible home prices will be capped in proportion to the average house price for first time buyers in that region.