BREAKING PROPERTY NEWS – 05/10/2021

Estate Agent Networking Breaking News

Daily bite-sized proptech and real estate news in partnership with Proptech-X. Today, Stanton looks at the Standard Duty Land Tax and Propertymark.

 

STANDARD DUTY LAND TAX – WILL IT ACT AS A BRAKE ON THE HOUSING MARKET?

There has been a lot of recent debate about stamp duty or SDLT, which stands for Stamp Duty Land Tax, levied by HMRC on land and property purchases.

With the Chancellor of the exchequer freezing the normal banding of the SDLT for property or land transactions completing at £500,000 or less, it has been estimated that close to a million buyers may have in some way gained from paying no or less SDLT.

In case anyone does not know what, the rates are in England as of the 1st of October 2021, they returned to normal.

Normal being, Zero tax up to £125,000, 2% tax on the next £125,000 – the band of £125,001 to £250,000, 5% tax on the next £675,000 – the band £250,001 to £925,000, 10% tax on the next £575,000 – the band £925,001 to £1.5M, 12% on anything above this.

If you are a first-time buyer in England, there is Zero SDLT on purchases up to £300,000. But you pay 5% on the band £300,001 to £500,000, however if the purchase is over £500,000 there is no relief and first-time buyers have to pay SDLT the same as a normal buyer.

If you are an investment buyer, a person buying a second home, or several homes, the SDLT payable is the same as the ‘Normal’ rate quoted above, plus 3%. So instead of being Zero tax up to £125,000, 3% is applicable, and 8% not 5% up to £500,000, and 13% not 10% up to £1.5M, and 15% not 12% on anything above this.

If you are a buyer from outside of the UK, buying in England as an investment you have to add another 2% in all the categories that a normal investment buyer pays, so you will be paying 5%, 7%, 10%, 15% and 17% depending on the purchase price.

Why all of this matters is that depending on where you live, and the value of your home, SDLT can be a real factor. For example in Middlesbrough the average house price is £167,000, in London is £695K. So at £167,000 a first-time buyer is paying no stamp duty, and a normal buyer is only paying £840. At £695,000 a first time-buyer gets no relief and will pay the same as a normal buyer, £24,750.

If you look closer, the recent higher taxation for non-domicile buyers who look to buy Prime property in say London at £5M will now pay £613,750, so will that dampen the actual sale prices being achieved. Though of course we can always rely on some to game any taxation system, such as an ex-prime minister and his barrister wife who recently were shown to have swerved a £312,000 SDLT bill.

All forms of property and land taxation are ‘unfair’ at the margins, there will always be winners and losers. Removing some of them altogether as the Chancellor did, with a known end date was always going to cause a stampede. With possible austerity now coming into view, fuelled by inflation and increased taxation, will the full return of SDLT in all its forms pour water on the over heated housing market.

 

PROPERTYMARK PUTS ITS FULL WEIGHT BEHIND THE ENDANGERED PRS LANDLORD

Propertymark has broken ranks and rigidly stated that it backs the plight of landlords in the private residential sector, who are being taxed and regulated out of existence. But most immediately are taking the brunt of the rent arrears caused by the pandemic.

Mark Hayward policy adviser for the organisation commented that, ‘The PRS supports five-million households in the UK and is an important provider of homes against a backdrop of an overwhelmed social housing system … at the moment, the risks associated with being a landlord are incredibly high and the financial help for tenants and landlords struggling under the weight of accumulated Covid-related debt is inadequate.’

Though there are no verified figures it is though that over 500,000 plus tenancies are in arrears at present, which could scale up to over 750,000 by the end of the year.

Propertymark is lobbying the government to think carefully about a mechanism such as a loan scheme to stop a mass exodus of private landlords, many of whom only own one investment property and utilise it as a way of generating income or as part of a pension strategy.

If there is a sudden move by landlords to divest themselves of rental properties which then pass into the general housing stock, this will bring even greater pressure on the government who are already behind in the social housing programme.

Andrew Stanton

CEO & Founder Proptech-PR. Proptech Real Estate Influencer, Executive Editor of Estate Agent Networking. Leading PR consultancy in Proptech & Real Estate. Want to contact me directly regarding one of my articles or maybe you'd like a chat about future articles? Email me via editor@stagingsite.estateagentnetworking.co.uk

You May Also Enjoy

Estate Agent Talk

Essential Garage Storage Solutions for Small Spaces

Maximize your garage space with practical storage ideas that keep your items organized and accessible. If you’re dealing with a smaller garage, smart solutions can make a big difference in keeping your space neat and usable. 1.  Wall-Mounted Storage Wall-mounted storage is an excellent way to save space and keep your garage organized, especially in…
Read More
Home and Living

How to Protect Your Property from Flooding and Water Damage

Flooding and water leaks can cause significant damage to your home or office. However, many issues can be prevented by taking proactive measures to protect your property. In this article, we’ll explain how to minimize risks and prepare for potential water-related threats. 1. Inspect and Maintain Your Plumbing System One of the most common causes…
Read More
Breaking News

ONS House Price Index – November 2024

Headlines Average UK private rents increased by 8.7% in the 12 months to October 2024 (provisional estimate); this is up from 8.4% in the 12 months to September 2024. Average rents increased to £1,348 (8.8%) in England, £766 (7.9%) in Wales, and £976 (6.6%) in Scotland, in the 12 months to October 2024. In Northern…
Read More
Breaking News

Foxtons Lettings Market Index October 2024

Headlines October saw the highest level of new stock entering the market, with an 8% increase from last year, the highest increase in four years October’s demand is marginally lower than last October and decreased 32% from September, as expected during this time of year Following a yearly high of £593 per week this September,…
Read More
Breaking News

Breaking Property News 20/11/24

Daily bite-sized proptech and property news in partnership with Proptech-X.   Proptech powered lettings service for BTR developers needing pre-approved, quality tenants at speed gets funding A proptech-driven letting agent has secured close to £500,000 during its first equity investment raise. Property Sense, headquartered in Stockport but operating nationally, secured the half a million pounds in…
Read More
Kerb appeal
Estate Agent Talk

Why November and December are the best and most affordable months to buy

Buyers and sellers looking for the right time to move can consider top reasons from property experts to start the process this November and December. The autumn and winter months may not be the first that come to mind when considering a move, but potential buyers and sellers can be reassured by the experts that…
Read More