The Chancellor has taken a measured approach in this Budget, providing extensions to Coronavirus support schemes and indeed new support measures were announced. He did announce an increase to Corporation Tax rates from 2023 but has provided some protection for smaller businesses.
There was a promise of no increases to Income Tax, VAT and National Insurance rates, but there was no such promise for other taxes. This, together with the clear statement that "once we are on the way to recovery, we will need to begin fixing the public finances" paves the way for tax increases, perhaps to be announced later this year following a series of consultations.
The Chancellor went fairly easy on landlords in today's budget, announcing an extended stamp duty holiday, but no immediate change to Corporation Tax or Capital Gains Tax.
To ease the stampede to complete purchases before the current stamp duty holiday comes to an end, as expected, Rishi Sunak announced that the £500,000 nil rate band would now end on 30th June instead of the end of March. Thereafter, to smooth the transition back to normal, the nil rate will be £250,000 until the end of September and will only return to the normal rate of £125,000 from October.
Corporation Tax will increase to 25% - higher than the expected 24% - although not until April 2023, while small businesses with profits of less than £50,000 will remain at the current rate of 19%.
Sunak didn't change Capital Gains Tax (CGT) rates, as many had feared. Instead he promised to maintain the current level until April 2026; it will remain at £12,300 for individuals, personal representatives and some types of trusts and £6,150 for most other trusts.
Despite the stamp duty holiday extension stealing the headlines in this afternoon's budget, the other major announcement for the property market was the confirmation of the new mortgage guarantee scheme, set to launch from April. The new scheme, set to launch to lenders from April, will aim to offer incentives that have been wiped out during the pandemic and will allow first time buyers and current homeowners to purchase properties up to £600,000 with a 5% deposit. Rightmove currently estimates that 86% of properties up for sale have an asking price of £600,000 or less. Some of the UK's largest lenders have already been confirmed to be in a position to start offering mortgages within the scheme from next month including NatWest, Barclays and Santander with others shortly after.
We firmly believe that property remains the safest and most productive investment despite the recent tax plundering measures of successive governments and we can assure you that Arkade Property remain well placed to sell or manage your property efficiently and ethically.