Chancellor of the Exchequer Philip Hammond will reveal the plan for the 2018 Autumn Budget on 29 October, and new changes for buy-to-let landlords are being speculated.
Brexit is likely to be the main focus of the Autumn Budget. However, given the Government has put improving the housing sector as a high priority on their agenda, many are predicting the property market will be effected in some way. Numerous rumours are circulating about what the Budget could mean for the property market, and in particular buy-to-let landlords.
Predictions involving buy-to-let landlords & tenants
Many news outlets are analysing the possible changes buy-to-let landlords could see in the Autumn Budget. In a recent article on Landlord Today, Andrew Turner, chief executive of Commercial Trust Limited, shared his predictions, including the possibility of tax breaks for longer tenancies.
Mandatory longer-term tenancies continue to be debated in Parliament. For a year, there has been speculation that landlords could be incentivised to offer longer term tenancies through tax breaks, so it is possible this will be announced as part of the Budget.
Additionally, landlords and tenants could potentially receive a capital gains tax break when a property is sold to a sitting tenant of at least three years. Currently, landlords pay up to 28% on profits for capital gains tax.
The tax break is a proposal from the think tank Onward, which claims the policy would benefit nearly half a million households over five years with an average capital gain of £15,000 per property. The ultimate intent is to encourage tenants to make the transition from renting to homeowning.
Are further stamp duty changes on the horizon?
Many have urged Hammond to overhaul stamp duty in the Budget to boost the housing market. Last year’s Budget abolished the stamp duty for all first-time homebuyers. David Westgate, chief executive of Andrews Property Group, thinks a banding stamp duty should be proposed this year.
However, some think that stamp duty will rise for buy-to-let investors. James Forsyth of The Spectator, known for his close connections to the Government, recently wrote a guest column for The Sun where he highlighted this prediction for the Autumn Budget.
He wrote: “This would, so the thinking goes, raise money for the Exchequer and help keep house prices down… But if the Government is serious about helping more people on to the property ladder, as opposed to just raising yet more money from Stamp Duty, then what’s needed is changes to the planning laws to get far more homes built where people want to live.”
Following Hammond’s speech on 29 October, MPs will discuss and vote on the suggested measures within the Autumn Budget.