Budget 2020: What is the impact on the property and construction sector?
Rishi Sunak announced a number of small changes as part of his first Budget as Chancellor. A number of these are focused on supporting the economy through the Coronavirus but also some measures to help in the longer term.
Specific matters relating to the property sector
The Chancellor announced plans to increase the funding for the Affordable Homes Programme as well as other funding to cover housing on brownfield land across the country. An amount of £1.1 billion has also been allocated from the Housing Infrastructure Fund for 9 different areas including Manchester, South Sunderland and South Lancaster.
The barriers imposed by the planning system for new housing will be reviewed with reforms to be put in place to bring the ‘planning system into the 21st century’. It is hoped that this will allow greater flexibility and less red tape in being able to meet the housing demands in the country.
To ensure that self-isolation does not have a significant financial impact on both businesses and individuals during the time of Coronavirus, extensions to Statutory Sick Pay are being made.
Business owners will now only benefit from a Business Asset Disposal Relief (formally Entrepreneurs’ Relief) Lifetime Allowance of £1m for qualifying disposals on or after 11 March 2020.
The rate of Structures and Buildings Allowances is to increase from 2% to 3% with effect from 1 April 2020 (6 April for unincorporated businesses). This was a new relief on building structures which was introduced from 29 October 2018.
The Employment Allowance will increase from April 2020 to £4,000 per annum for those companies that qualify. This was previously £3,000 per annum.
The tapered annual allowance for pensions is to apply to those with an income over £200,000 from 6 April 2020 as opposed to £110,000 which is the current threshold.
Other property matters
Included in the detail of the Budget it was also announced that Housing Co-operatives will benefit from a relief against ATED and SDLT for dwellings purchased for £500,000 or more. This will take effect from 1 April 2021 with refunds for ATED being available for 2020-21.
Following the consultation related to SDLT and the purchase of property by non-UK residents, it was confirmed by the Chancellor that a 2% SDLT surcharge will be added to the purchase of residential property in England and Northern Ireland from 1 April 2021. The money raised will be used to address rough sleeping in the country.
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