This will be an annual tax and the charge will be imposed on top of the existing council tax.The money will go to the Treasury rather than the local authority.
From a property perspective across all price sectors, the Budget has little or no impact and any “bounce back” is likely to be moderate, not a dramatic boom.The weight of new taxes and limited reforms means we’re more likely to see steady growth and cautious investor re-entry rather than a surge in building or housing-led economic growth.
What It Means For The Property Market & Landlords / Tenants
The decision not to scrap stamp duty means there is no relief for home buyers and no increased incentives to move or buy. For landlords, higher taxation on rental income (from 2027) will erode net returns. But one thing is for certain, this added cost will be passed on to Tenants so this move alongside the Renters Right Act earlier this year will cost Tenants more for their rented homes. There is much speculation about the new “mansion tax” suppressing demand at the very top end of the market, but we don’t believe this will be the outcome. The buyer demand will now return because the level of the “mansion tax” is known and whilst it might keep a lid on prices in this sector, at least transaction numbers will return. The tax isn’t coming in until 2028 and by then another General Election will be on the horizon so disgruntled home owners wary of property taxes in general will take their discontent out at the ballot box.
In other word, a steady business as normal outlook for the short to medium term.
Overall, expect steady demand property sales and rentals, modest rental growth in strong micro-markets, and continued importance of quality and location.
John Holden - Chairman McCarthy Holden
mccarthyholden.co.uk | 7
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