Following the Chancellors Autumn Statement, Jeremy Raj, National Head of Residential Property at Irwin Mitchell comments on the following topics:
SDLT:
“It appears that once again the Chancellor of the day has been unable to resist tinkering with SDLT. However, there will be relief within the industry and for many buyers that all he has done is to stretch out the September ‘cuts’ until the end of March 2025, and there is nothing new or more complex to contend with. The industry will this time round be much more focused on how the markets react, and – ultimately – whether the cranking up of interest rates will continue apace. Frankly, given the ups and downs of recent times, many will question this Government’s ability to say what will be happening in March 2023, let alone in 2025, but there will be some sighs of relief from those currently mid-transaction that they will still be paying what they expected in SDLT.”
ATED (Annual Tax on Enveloped Dwellings):
“The hefty increase of 10.1% for the 2023-24 charging period was of course a choice, and represents a continuation of the Government’s antipathy towards corporate structures and landlords in general. Coupled with the new (returning) Secretary of State’s pronouncements regarding housebuilders, it seems that the industry continues to find itself out of favour at a time when it’s energy and enthusiasm is most needed. This is a dangerous path to continue down when we desperately need to build more, facilitate all tenures and ensure funds are available for the proper greening of our housing stock.”
Council Tax:
“Freeing Councils to increase rates by 3%, with an additional 2% social care precept from next April, will bring much-needed additional revenue to cash-strapped Local Authorities. It will though come with its own pain points, particularly for the asset-rich/low income sector of homeowners – frequently the elderly, who despite the Cost of Living payments will still be struggling with generally increased costs. The lack of suitable alternative accommodation for such homeowners has long been a deterrent for them to move from the housing stock they occupy and it will be interesting to see whether these rises translate into additional movement in the market. It is also to be strongly hoped that Council Tax banding will not prove to be the outdated blunt instrument it has been in recent years. Councils will need to take care not to tip struggling families and others into further financial hardship in these difficult times. Unfortunately the market remains slow and cumbersome for a variety of reasons, so the ability to downsize to avoid such tax increases or free up equity – and bedrooms – is limited.”
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