By following through on plans to reduce Corporation Tax and boost productivity through infrastructure investment, Philip Hammond tries to ensure the UK is an attractive place to do business, as we grapple with the process of Brexiting.
When it comes to housing, with the £3 billion fund for 2,000 homes and £2.3 billion housing infrastructure pot for up to 100,000 new homes in areas of high demand, as well as additional funds for 40,000 affordable homes, the Chancellor is trying to address the housing shortage.
However the Chancellor avoided any change to former Chancellor Osborne’s tax legacy on the residential buy-to-let market, as many landlords had hoped. So this will act as a deterrent for many landlords considering investment in the Private Rented Sector, which is a key component of the housing solution in the UK.
It may have been wishful thinking on the part of some of the nearly two million landlords in the UK, but they will now need to plan and act according to the tax framework Osborne introduced. What’s more the announcement to ban upfront fees charged to tenants by letting agents, may lead to additional landlord costs, which will exacerbate the situation further.
We may soon be seeing a fillip in commercial property investments, as it is now firmly taxed more favourably than residential property, so the likes of Purpose Build Student Accommodation, Hotel investments as well as other more recognised commercial property investments such as office buildings. Not to mention looking abroad for investments, which do not attract the same stamp duty surcharge.
Louise Reynolds, Director of award-winning European property investment firm Property Venture®
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Tags: BREXIT, Buy to let, Commercial, hotel, investment property, PBSA