How Will The Emergency Budget Influence The Property Market?
There have been many rumours concerning the impact the Emergency Budget will have on the property market on the 22nd June, mainly how their tax suggestions will influence homeowners and property investors.
From restrictions to Private Residences Relief to hikes in Capital Gains Taxes; many property investors in particular are concerned about how these tax changes will influence the long term profitability of their property investments…
Speaking on this growing concern, property advisors have revealed 5 key areas which they believe the Chancellor will cover during the Emergency Budget. These include:
- Capital Gains Tax: ever since the Election rumours have been rife about the government increasing Capital Gains Tax and it would seem that property advisors are in agreement that such changes are on the horizon. Using this tax to cover the cost of the first time buyer stamp duty relief, should the Chancellor raise Capital Gains this will far from help property investors to invest. The only investors to benefit from such a rise would be overseas property investors who can use favourable exchange rates to invest in property.
- Private Residences Relief: for the time being this relief allows homeowners to sell their only or main residence without having to worry about capital gains tax. However, property advisors predict that the terms of this relief will soon be tightened up to stop homeowners who own more than one property from varying which of their properties is their main residence.
- VAT (Value Added Tax): VAT increases are believed to be on the horizon, influencing renovations and new property developments as well as normal property investments.
- Capital Allowances: some property advisors are predicting that the government, in a bid to cut corporation tax, will reduce capital allowances. However by making such a cut, this will prevent property investors from recouping as much of their property costs.
- Inheritance Tax: whilst property advisors feel that inheritance tax is unlikely to change from its £325,000 threshold, others still feel that it will become more restricted in terms of its domicile rules. As it stands a non-dom is brought under the inheritance tax net if they have lived for the last 17 out of 20 years in the UK. However, property advisors are confident that the government will shorten this to just 7 out of 9 years so they can align it with the guidelines used for remittance basis charges.
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- A Little TLC For Landlords Please…
- Will The Property Market Repeat The Cycle?
- Will Property Landlords Receive CGT Exemptions?
- Property Directives Need To Be Revised
Tags: invest in property, property advisors, property developments, property investments, property investors, property market
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