Autumn Statement 2015 - new property measures

Here are the main announcements:

• ‘Right to Buy’ to be extended to housing association tenants during 2016.

• Government to spend £2.3bn on 200,000 new starter homes, and then a discount available to first time buyers under 40. The 20% discount is given to builders – who can go online now and apply to make their developments for ‘starter homes’.

• The ‘Help to Buy Shared Ownership Scheme’, which enables people to initially buy between 25% and 75% of their council or housing association home, will be extended by reducing current restrictions on who can participate. They also have the opportunity to buy the rest of the property over time, whilst paying a capped 3% rent on the balance.

• From early 2016, an increase from 20% to 40% of loans available from the government under the ‘London Help to Buy’ for homes costing up £600,000. A 5% deposit is required but the balance can be funded by commercial mortgage.

• A 3% increase in stamp duty land tax (SDLT) above current rates is planned for purchases of ‘additional residential properties’ (presumably those not used as main homes), from 1 April 2016 worth more than £40,000. Exemptions will apply to caravans, mobile homes and house boats. The Government will consult on the detail and also on the possibility of exempting certain corporates and funds owning multiple properties.

• The filing and payment window for all SDLT cases will be reduced from 30 days to 14 days, coming into effect from 2017/18.

• From 1 April 2016, the Government proposes to extend the reliefs available for Annual Tax on Enveloped Dwellings (ATED) and the 15% rate of SDLT to equity release schemes, property development activities and employee occupied properties.

• Capital gains tax (CGT) payable by individuals is normally payable on 31 January following the end of the tax year of disposal. The gap could be nearly two years. From April 2019, any CGT due on residential property disposals (this would not include those covered by principal private residence relief), will be due 30 days after completion.

• The Finance Act 2016 will contain provision for an SDLT seeding relief to be introduced for certain authorised property funds. There will be a defined seeding period of 18 months and a portfolio test of 100 residential properties (or 10 non-residential properties) of £100m value.  

It remains to be seen whether these measures will work as intended, but the number of changes to the taxation of residential properties over recent years is quite staggering. Yet the long term rising trend of London house prices seems set to continue regardless.