Many were expecting some more changes to property tax because of this week’s budget, but as it happens things were quiet in this area.
Here are some key updates on the UK housing market:
If you’re looking to purchase your first ‘home sweet home’, the Chancellor presented an additional option in his Budget speech by confirming the launch of new NS&I Bond.
Available from April this year, the account will pay a fixed rate of 2.2% on deposits of up to £3,000. The maximum total interest available on the account is £202 before any tax is accounted for.
If you’re planning to move home and were hoping for a reprieve on stamp duty, the Chancellor ignored industry calls to overhaul the property tax.
These included demands for the tax to be paid by sellers rather than buyers. Currently, home buyers are liable for the tax when purchasing a residential property or a plot of land costing more than £125,000, or £40,000 for a second home.
If you’re currently renting your home and were hoping for an update on the ban on lettings agent fees the Chancellor promised in his Autumn Statement last year, you’ll have to wait a bit longer. In fact, it wasn’t mentioned at all by the Chancellor. However, the consultation will reportedly take place this month or next.
If you’re a buy-to-let investor, mortgage interest tax relief will be gradually cut back to the basic rate of 20% between April 2017 and April 2020. Higher rate (40%) and additional rate (45%) taxpayers will stand to lose the most. Wear and tear relief has already been capped at a rate of 10%.
However, the amount you can earn in rental profits before tax is payable will soon nudge upwards as the personal tax-free allowance – currently £11,000 – will rise to £11,500 from 6 April. And the Chancellor confirmed it would stand at £12,500 by 2020.
These thresholds are set to remain in place at least until November, when the Chancellor will unveil a combined Budget and Autumn Statement.