At Butler Sherborn, we receive this Budget with cautious optimism. The Chancellor seems to have found a balance between supporting families, businesses and the self-employed, as the effects of the Covid Pandemic role on short to medium term, whilst looking to properly address and correct the deficit in the future.
For the property sector, there are some helpful measures, albeit the Stamp Duty holiday is probably a two edged sword.
In the short term, the nil rate SDLT band remains at £500,000 and this has been extended from 31st March 2021 to 30th June 2021. This nil rate band then reduces to £250,000 until 30th September 2021, before returning back to £125,000 from 1st October 2021. At some point therefore, there will be the cliff edge to face, but the phasing will certainly help maintain the activity in the residential market.
There is a new mortgage Government guarantee scheme to lending, offering 95% mortgages on homes worth up to £600,000.
Capital Gains Tax (CGT) rates remain the same, and have not been increased in line with income tax, as rumoured. This will be relevant, and significant to anyone making capital gains on their property investments.
There are no increases in income tax, inheritance tax bands nor VAT. The Furlough scheme is again extended, to the end of September 2021, with employers making contributions.
Corporation Tax remains at 19% until 2023, and then increases to 25% on profits over £250,000.
On balance, this Budget should restore a sense of confidence in our economy. It has provided both practical and fiscal plans, and helps to provide a degree of certainty. The property market will benefit from these measures.