Episode Details

As expected, the Chancellor Rishi Sunak has extended the Stamp Duty Holiday for a further three months to help sellers and buyers complete transactions.

Budget Main Points

Covid-19 Support Extended

• Furlough extended to end of September
• Government to continue funding 80% of employees' wages for hours not worked
• Employers to contribute 10% in July and 20% in August and September
• Support for self-employed to be extended until September
• 600,000 more self-employed people eligible for help with access to grants widened
• £20 uplift in Universal Credit worth £1,000 a year extended a further six months
• Working Tax Credit claimants will get £500 one-off payment
• Minimum wage will increase to £8.91 an hour from April.

Property Investor Takeaway

• Stamp duty holiday on house purchases in England and Northern Ireland extended to June
• No Stamp Duty tax liability on sales of less than £500,000 for residential buyers
• Mortgage Guarantee Scheme for 95% to be introduced next year.

Economy and Borrowing

• UK economy plummeted 10% in 2020
• Economy forecast to rebound in 2021 by 4% 
• Economy forecast to rebound to pre-Covid levels by mid-22, with growth of 7.3%
• Over 700,000 people have lost their jobs since pandemic started last year
• Unemployment expected to peak at 6.5% next year, lower than 11.9% previously predicted
• UK will borrow a peacetime record of £355bn this year.

Tax

• Income tax, national insurance or VAT – no changes
• Personal income tax allowance frozen at £12,570 from April 2022 to 2026
• Higher rate income tax threshold frozen at £50,270 from 2022 to 2026
• Corporation tax hiked from 19% to 25% a 30% rise, from April 2023
• Rate stay at 19% for 1.5 million smaller companies with profits less than £50,000
• Stamp duty holiday on house purchases in England and Northern Ireland extended to June
• No Stamp Duty tax liability on sales of less than £500,000 for residential buyers
• No changes to inheritance tax or lifetime pension allowance or capital gains tax allowances
• Most people will pay more tax when the effect of frozen allowances kicks in
• Higher corporation tax rates could deter businesses from investing in the UK.

Business

• Tax breaks for firms to "unlock" £20bn worth of business investment
• Firms will be able "deduct" investment costs from tax bills, reducing taxable profits by 130%
• Incentive grants for apprenticeships to rise to £3,000 and £126m for traineeships
• VAT rate for hospitality firms to be maintained at reduced 5% rate until September
• Interim 12.5% rate to apply for the following six months
• Business rates holiday for firms in England to continue until June with 75% discount after 
• £5bn in re-opening grants for non-essential businesses worth up to £6,000 per premises
• New visa scheme to help start-ups and rapidly growing tech firms source overseas talent
• Contactless payment limit will rise to £100 later this year.

The government will publish full details of these changes over next few days and weeks.

Some property experts expect property prices to rise due to a combination of fiscal stimulus (money printing and government borrowing), stamp duty holiday extension, historically low interest rates and the return of a 95% mortgage free-for-all! 

Property investors should l