After just a few weeks in the role, expectations were high for an “interesting” Budget however, the global economic impact of COVID 19 virus set a different tone to Rishi Sunak’s first Budget.
So, what did the Budget hold for the property sector?
The Government response and plans for businesses affected by COVID 19 included ramping up the Time To Pay arrangements, backing loans for businesses, funding sick pay for some employees, easier access to benefits for self employed and providing grants for small business which all may be useful to property businesses if sites are delayed due to workers and subcontractors self isolating.
Housing is still high on the agenda with a commitment to create at least 1 million new homes by the end of this Parliament supported by an additional £9.5bn investment in the Affordable Homes Programme. Two specific funds will also be created to unlock new homes by assembling development land. An additional £1bn has been made available to remove any unsafe cladding from residential buildings over 18m.
Planning issues are still to be resolved and reforms to the planning system are expected with an announcement this week and a White Paper to come in the Spring.
Investing in the future of construction, the Budget announced funding for T levels, apprenticeships and the National Skills Fund. The Chancellor also confirmed that new build homes would need to be future proofed with the intention to legislate that all new build homes are built with gigabit-capable broadband.
The Chancellor also set out the Government’s green agenda setting a future homes standard for energy emissions, encouraging low carbon heating by extending the RHI until 31 March 2022 and introducing a new grant scheme for heat pumps and biomass boilers.
For property owners, various reliefs were announced for business rates, extending the retail discount to a range of other businesses for a year and providing a relief for pubs, newspaper offices and public loos. A full review of the rates system is launched and expected to report back in the Autumn.
The previously announced increase in Structural & Buildings Allowance from 2% to 3% has been confirmed.
Changes to Entrepreneurs Relief were widely expected and the lifetime ER allowances was slashed form £10m to £1m costing up to £900k in lost relief. Property developers will still likely wish to use SPVs for developments for commercial reasons but the tax position on liquidation is likely for most developers to be worse.
A couple of changes to SDLT were announced in the form of an additional 2% surcharge for non residents buying into the UK and housing co-operatives being exempted from ATED and the 15% rate of SDLT.
Anti avoidance is still high on the government’s agenda and legislation will be enacted to prevent non compliance with the CIS scheme and prompted supply chain due diligence. The domestic reverse charge for construction services which was due to be implemented last year will be brought in 1 October 2020.
