On 29 October, the Chancellor Philip Hammond is set to announce the 2018 Budget. With the prospect of Brexit looming early in 2019, it is highly likely that the property industry will, once again, come under close scrutiny by the government.
Stacy Eden, Head of Property at national audit, tax, advisory and risk firm, Crowe, comments:
“Stamp Duty Land Tax (SDLT) has consistently been perceived by the industry as the biggest tax barrier to real estate businesses. This is particularly the case in the residential market where reductions at the top-end would be widely welcomed. This would free-up liquidity in the market, which will ultimately increase housing transactions and sales. We may even find that it raises more money in the longer-term. Two thirds of respondents to our recent property and construction survey stated the government’s fiscal policies were bad for the real estate industry, with SDLT being the biggest concern over 80%.
“Additionally, it will be interesting to see the Chancellor’s approach to simplifying the planning process for property development. Philip Hammond could reinvigorate UK house-building by freeing up more areas of green belt land. Investing in planning departments to try and get closer to house-building targets is of great importance. We are currently well short of annual housebuilding targets and this is contributing to higher house prices in certain areas. Again, the vast majority (77%) of respondents to our survey agreed that this approach would be an effective solution to meet these demands.”
Paul Fay, Property Tax Partner at national audit, tax, advisory and risk firm, Crowe, comments:
“A stable and competitive tax system is vital. There have been too many changes in recent years and these have negatively affected the market. We need a period of tax stability. The UK tax system for the property sector has become increasingly complex in recent years and any simplification would be welcome.
“Additionally, an exclusion of the 3% second home surcharge from affordable private rental housing would encourage the provision of affordable housing for lower paid workers.”