Thu 09 Mar 2017
The Budget made no reference to the phased reduction of mortgage interest tax relief beginning next month, nor to letting agency fees levied on tenants in England, nor on the additional properties stamp duty surcharge.
These were all issues which the property industry wanted the Chancellor to reverse or at least moderate.
James Morgan of John German Estate Agents gives his thoughts on this year’s Spring Budget “I am extremely disappointed that the Chancellor failed to reverse or reduce the impact of recent tax changes in the property sector. Changes to Stamp Duty over the last 2 years have and continue to severely disrupt the sale of higher value properties above £925,000 and private Landlords, such a vital part of the provision of housing in England, have been deterred by the 3% stamp duty surcharge and the restriction of mortgage interest relief which comes into effect this April.
At a time when housing supply remains in seriously short supply it is unbelievable that Government, especially a Conservative one, wants to punish those that have consistently invested in, grown and supported the rented sector. “
There is concern that changes to self-employed National Insurance and a hardening of government policy towards self-employed incorporation may impact landlords in the long term.
Key to this was Hammond's reference in the Budget statement to the setting up of companies to reduce tax liabilities - something which has happened in recent months in the case of landlords wishing to reduce their liability under the new mortgage interest tax relief regime starting next month.
Hammond said yesterday: "We must ensure that our corporate tax regime does not encourage people across the economy to form companies simply to reduce tax liabilities, pushing the burden of financing our public services onto others. HMRC estimates that existing incorporations cost the public finances over £6 billion a year and the OBR forecast an additional annual cost to the Exchequer from those choosing to incorporate of £3.5 billion a year by 2021-22."
"Very good, house sold quickly and new house also purchased through John German."