The Autumn Budget of 2017 is set to take place on Wednesday November 22, with the major annual financial update by Chancellor Philip Hammond switching from the spring.
Here we take a look at what is potentially on the cards.
There has been talk for some time that Stamp Duty is putting off potential home buyers and movers and therefore putting pressure on the housing market in the UK. Whereas Stamp Duty income has reached a record high, home sales have taken a dive. There are therefore calls being made on the Government to remove Stamp Duty altogether for older homeowners, with the aim of encouraging downsizing so that larger family homes are freed up for younger families.
Homebuilder McCarthy & Stone has recently conducted research revealing that pensioners would be more inclined to make a move to a smaller property if there was no Stamp Duty to pay. It is also thought that Stamp Duty has brought higher value sales to a halt, creating a knock-on effect throughout the remainder of the market.
Nick Leeming is Chairman of Jackson-Stops. He said: “Philip Hammond must view the property market through the eye of the homeowner and come up with a solution in the Autumn Budget.
“If they were to take steps to reform the impact stamp duty has on the top end of the market, even just marginally, they would not only see their revenue dramatically increase but it would also get the market moving again at all levels.’
Alternatively, the liability for the tax could be switched from buyers to sellers, suggests the AAT (Association of Accounting Technicians). The AAT says this would boost mobility at all levels, because people on their way up the ladder would be paying duty on the lower-priced house that they are selling rather than the one they are buying. They say it would also give more first time buyers a leg up onto the property ladder, whilst keeping the Treasury’s income intact.
Phil Hall, head of public affairs and policy for AAT said: ‘It’s widely accepted that Stamp Duty adds a burden to any homeowners seeking to move – especially first-time buyers – because they must pay the tax as an immediate upfront cost together with finding a deposit, surveyors and solicitors fees and so on.
“This stunts mobility, impacting on employment and productivity as well as reducing the supply of new homes, which adds to the affordability crisis.
“Switching liability to the seller would be a relatively simple way of solving these problems.’
It is thought that pension tax relief may be under threat. The current system links relief to the income tax rate of a saver. This means that tax payers in the higher rate band enjoy a 40 per cent relief rate, whilst those on basic ate get 20 per cent.
There is talk of a flat rate of 33 per cent, which means earners in the middle band would be hit harder. Pensions director at Aegon, Steven Cameron, feels that tax relief should not be changed until Brexit is done and dusted however, so that savers have some security for the future. He says that consideration should be given to combining pension and stamp duty policies instead.
“Reducing stamp duty would encourage pensioners to downsize, freeing up family homes with benefits across the housing market while boosting funds to pay for retirement,” he suggested.
It remains to be seen of course what will actually transpire on 22 November, but rest assured we’ll be reporting it right here, so keep us bookmarked.