Landlords in Brixton and Battersea have been dealt a blow by Chancellor George Osborne’s latest Budget.
And a new savings scheme for homebuyers will do little to make buying a home in these popular parts of London any easier.
Residential landlords who are looking to cash in on rising property values in in Brixton and Battersea have been excluded from a capital gains tax cut announced by the Chancellor.
George Osborne used his Budget speech to reveal the higher rate of CGT is being reduced from 28% to 20%, while the basic rate will fall from 18% to 10% but will remain at the old rates for investors who sell residential property.
The Treasury has also announced it will extend its stamp duty surcharge on purchases of additional property to include those who buy more than 15 properties.
From 1 April, an extra 3% levy will now be applied to standard stamp duty rates on all purchases of property that is not intended to be the buyer's main home - even institutional investors backing big developments.
New savings scheme for homebuyers
Homebuyers, on the other hand, have received some extra help from George Osborne.
The Chancellor used his latest Budget speech to turn the existing Help to Buy ISA into a new Lifetime ISA for savers aged under 40. This will continue to pay a 25% bonus to account holders saving towards their first home, but will also pay the government top-up if the saver holds on to the ISA until retirement.
However, the savings and bonus can only be used towards a deposit on a first home worth up to £450,000.
The Chancellor has announced new stamp duty rates for commercial property.
Previously, stamp duty rates for commercial property applied to the whole transaction value, with fees of 3% being charged for business premises sold for between £250,001 and £500,000, and 4% above that figure.
But from now on the rates will apply to the value of the property over each tax band.
The new rates and tax bands will be 0% for the portion of the transaction value up to £150,000, 2% between £150,001 and £250,000 and 5% above £250,000.
Stamp duty rates for leasehold rent transactions will also change, with a new 2% rate on leases with a net present value over £5m.
Other measures affecting the property market
The 2016 Budget also contained a number of other announcements affecting the property market in Battersea and Brixton.
- Homeowners who rent out either their parking spaces were handed a £1000 tax break, which will come into force in April next year.
- Others who let their flats and houses as holiday homes using sites such as Airbnb will also be offered the perk as an incentive to declare their earnings.
- The government has unveiled its Starter Homes Land Fund prospectus and is inviting local authorities to access £1.2bn of funding to “remediate brownfield land to be used for housing”. Chancellor George Osborne says this aims to deliver at least 30,000 starter homes, which is far below the 59,000 homes per year it is estimated that London as a whole needs.
For more information on the 2016 Budget, click on the link below: