The 2020 Budget took place earlier this week and had a number of impacts on the financial elements of the property sector. Here we will discuss the key points and their impacts.
In advance of the budget the key surprise was the reduction in interest rates from 0.75% to 0.25%, which was an emergency measure due to concerns around coronavirus.
Budget in summary:
- The government has allocated £12.2bn of grant funding allocated for the affordable homes programme from 2021/22
- The government has allocated up to £400m for mayoral combined authorities and local areas to establish housing on brownfield land across the country
- £1.1bn allocated from the housing infrastructure fund for nine different areas, including Manchester, south Sunderland and south Lancaster
- the government will introduce a relief for qualifying housing co-operatives from the annual tax on enveloped dwellings (ATED) and the 15% flat rates of SDLT on purchases of dwellings over £500,000
- an additional £1bn has been allocated to remove unsafe cladding from residential buildings above 18 metres following the Grenfell fire
- 2% stamp duty land tax (SDLT) surcharge on non-UK residents purchasing residential property in England and Northern Ireland from 1st April 2021
In other areas, Entrepreneurs relief has been reduced from a lifetime allowance of £10m to £1m, reducing the tax relief available.