Following the Chancellor’s Autumn Budget, Rebecca Wilkinson, Business Tax Partner and Property and Construction sector specialist at Menzies LLP, a leading UK business advisory and accountancy firm, offers her commentary on the impact the measures announced will likely have for the UK Property market.
“Private landlords holding rental portfolios can breathe easier, as CGT rates on residential property sales remain at 24%. With no-fault evictions ending and new rent control rules on the horizon, many landlords are considering exiting the buy-to-let market. Fortunately, they can now do so without facing raises to CGT.
However, a SDLT surcharge hike from 3% to 5% for companies and second-property buyers may dampen demand. Landlords hoping to sell with tenants in place may struggle to find fewer buyers, as higher SDLT makes buy-to-let properties a less attractive prospect.
Property developers will also be subject to higher rates of SDLT. This, coupled with rising labour and national insurance costs, could cause delays to the government’s target to build more affordable homes. Financing new projects may also tighten with the CGT rate on share sales rising from 20% to 24%, deterring high-net worth individuals and overseas investors who often fund UK projects due to favourable tax rates, and may well look elsewhere.”
