Chancellor of the Exchequer Rishi Sunak today issued a summer statement with some good news for property investors.
Stamp Duty Holiday For Buy-to-Let Investors
A temporary stamp duty holiday for England and Northern Ireland has been announced on the first £500,000 of any property sales.
This raises the threshold from £125,000 or £300,000 for first-time buyers.
Unfortunately the 3% additional duty will still apply to buy-to-let properties.
This stamp duty holiday will apply from 8 July 2020 until 31 March 2021.
Stamp duty in Scotland and Wales will be unaffected, so you will not make a saving when buying in these areas and their standard rates will apply.
Energy Efficiency Grants For Landlords
The government will be bringing in a grant scheme for all homeowners and landlords for spending on energy efficiency, dubbed the ‘Green Homes Grant’. The government will pay two thirds of the cost of such improvements up to a total of £5,000.
This may be a good opportunity to make savings on the heating bill of your HMOs or simply add value to your properties.
Serviced Accommodation VAT Cut?
The government has announced that it will cut VAT for accommodation from 15 July 2020 to 12 January 2021 across the UK to 5%.
While the full details of this plan are not yet published this is likely to mean that serviced accommodation providers will have a reduction in their VAT bills to just 5%!
Property Development: Planning Reform
The government has also alluded to planning reform which is likely to help property developers:
The government will introduce new legislation in summer 2020 to make it easier to build better homes in the places people want to live. New regulations will make it easier to convert buildings for different uses, including housing, without the need for planning permission. In July 2020, the government will launch a policy paper setting out its plan for comprehensive reforms of England’s planning system to better support the economy and release more land for housing in areas that need it most.A Plan for Jobs 2020
Opportunities and Risks
According to the Government there is a three stage plan for recovery:
The recovery will take time and require all the dynamism and creativity that exists across all sectors and in all regions and nations of the UK. The government’s initial response is helping families and businesses through the pandemic, protecting jobs and livelihoods. The Plan for Jobs is the next step towards economic recovery and securing the UK’s long-term prosperity.
The third phase of the government’s plan will be set out in the autumn with measures to support the longer-term recovery through a Budget and a Spending Review. These will detail further plans to invest in public services, to support innovation and growth-enhancing infrastructure with a National Infrastructure Strategy, to seize global opportunities and to level up opportunity across every region and nation of the UK.A Plan for Jobs 2020
The policies set out by the government are an attempt to stimulate the economy following the coronavirus lockdown. These measures therefore offer a number of opportunities for those that use them shrewdly. However there is certainly an element of risk. If the government fails in its attempt to revive the economy there may be a bumpy road ahead for investors. As always it is important to mitigate these risks appropriately.