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Rishi Sunak has unveiled the government's tax and spending plans for the year ahead in his Autumn Budget that increases spending on public services amid higher than expected ecconomic growth.
The effect on the property market is not as wide ranging as some might have feared. He has made some short term and long term changes to Business Rates and has given details of the new Residential Development Tax, the proceeds of which will be used to fund remdiation work on dangerous cladding.
The rates of Stamp Duty and Inheritance Tax have not been changed but there is one minor change to Capital Gain Tax in that the deadline for filing a tax return will be extended from 30 days to 60 days, from midnight.
The Chancellor has pledged £5 billion to remove unsafe cladding from highest risk residential buildings. This will be funded by a Residential Property Developers Tax which will be levied on developers with profits over £25m at a rate of four per cent. The investment in housing and housing-related activity will total £24 billion including £11.5 billion towards affordable homes.
The other main points of the Budget are:
- Inflation in September was 3.1% and is likely to rise further - to average 4% over next year, according to estimates
- UK economy forecast to return to pre-Covid levels by 2022
- Annual growth set to rebound by 6.5% this year, followed by 6% in 2022
- Unemployment expected to peak at 5.2% next year, lower than 11.9% previously predicted
- Wages have grown in real terms by 3.4% since February 2020
- Borrowing as a percentage of GDP is forecast to fall from 7.9% this year to 3.3% next year
- Borrowing as a percentage of GDP will then fall in the following four years to 1.5%
- The government is scheduled to reinstate its commitment to spend 0.7% of GDP on foreign aid by 2024-25