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On the 3rd March, Chancellor Rishi Sunak announced the Spring Budget for 2021. The Budget unveiled the government's tax and spending plans for the year ahead, including a series of measures to support businesses through the pandemic and assist the UK's long-term economic recovery.<\/p>\n
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Among these plans are tax changes, extensions to Stamp Duty and new mortgage schemes – but how will these measures affect landlords and the wider property sector?<\/p>\n
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Rishi Sunak announced that the Stamp Duty Holiday<\/a> – initially introduced in July 2020 – will be extended for another three months. During this time, first-time buyers and those replacing their residential properties will pay no Stamp Duty below \u00a3500,000. <\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n The Spring Budget also noted that Stamp Duty rates will not go back to 'normal' until 1st October 2021. Instead, there will be a interim period from July to September where the threshold is lowered to \u00a3250,000. After this point, stamp duty rates will return to their original thresholds. <\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n Many landlords were unphased by the Stamp Duty Holiday back in July. In a survey carried out by LettingaProperty.com, only 13% of landlords reported that the changes had encouraged them to buy more property \u2013 with the majority (75%) not feeling affected by it at all.<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n One landlord felt that\u00a0\u201cit hasn\u2019t been made clear what Stamp Duty landlords still have to pay\u201d<\/em>, whilst another considered the changes to be\u00a0\u201cgreat for residential purchases but it doesn\u2019t make any difference for buy to let\u201d<\/em>.<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n Read more: Landlord Stamp Duty Holiday Extension: How Does The Stamp Duty Holiday Affect Buy-To-Lets?<\/a><\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n Although the primary focus has been on first-time buyers, landlords and property investors can<\/em> benefit from the Stamp Duty Holiday and the extension announced in the Spring Budget 2021. <\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n Before July 8th 2020, buy-to-let Stamp Duty rates were as follows:<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n So, if you purchased a \u00a3500,000 buy-to-let property before the Stamp Duty changes<\/a> took place, you would have paid \u00a330,000 (3% of \u00a3125,000, 5% of the next \u00a3125,000 and 8% of the remaining \u00a3250,000).<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n Until 1st July 2021, landlords and property investors are only required to pay a\u00a03% flat-out fee<\/strong>\u00a0up to the raised threshold of \u00a3500,000<\/strong>. So, instead of paying \u00a330,000 in Stamp Duty on a \u00a3500,000 property \u2013 you would only pay \u00a315,000.<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n After 1st July and until 30th September 2021, this threshold will be lowered to \u00a3250,000. Landlords can still benefit from this \u2018interim\u2019 period. For example, if you purchase a buy-to-let at \u00a3250,000 between these dates you would pay a 3% stamp duty fee of \u00a37,500.<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n However, if you purchased this same property on 1st October 2021 (when stamp duty rates go back to normal) your stamp duty charges<\/a> would be \u00a310,000 (3% of the first \u00a3125,000 then 5% of the remaining \u00a3125,000).<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n Buy-to-let property purchases above \u00a3500,000 will also be subject to additional Stamp Duty rates. Here\u2019s a quick break down of the brackets:<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n Find out how much Stamp Duty you would pay (and how much you would save compared to normal rates) with our Buy-to-Let Stamp Duty Calculator.<\/p>\n \n\n\n\n\n<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n The Spring Budget also revealed that 95% mortgages will become available from April 2021. <\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n When the pandemic first hit the UK<\/a>, many mortgage lenders retracted their 95% mortgage offers to reduce their exposure. Now, buyers will have the chance to get on the property ladder with a smaller deposit amount.<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n The mortgage scheme is thought to be the “successor” of the previous Help to Buy scheme and will be available until 2023. It will apply to properties up to \u00a3600,000 – but is likely to be unavailable for investment purchases.<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n Rightmove<\/a>\u00a0have calculated that the loans will cover 86% of properties for sale in the UK, however, rising house prices will still see buyers scraping together a hefty deposit sum.<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n Prime Minister Boris Johnson hopes the scheme will help renters buy their own properties, stating: “I want generation rent to become generation buy and these 95 per cent mortgage guarantees help to deliver this promise\u201d<\/em>.<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n Mark Hayward, Chief Policy Adviser at Propertymark, has also commented \u201cA government-backed mortgage guarantee scheme will help first-time buyers get on the housing ladder at a time when for many owning a home seems an impossible dream<\/em>“.<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n Read more: 11 Things Landlords Can Expect from 2021<\/a><\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n Incorporated landlords and letting agencies will face a significant corporation tax increase in 2023.<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n The chancellor has announced that corporation tax\u00a0will remain at 19% for now, but will be increased to 25% in April 2023. <\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n Sunak explained that this tax increase was part of the government's plan to get borrowing “back under control” and position the economy to face the next crisis. <\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n A new “small profits rate” will maintain the 19% rate for firms with profits of \u00a350,000 or less, meaning around 70% of companies (1.4 million businesses) will be “completely unaffected” by the tax hike. Beyond this, there will be a tapered increase of corporation tax up to 25% for profits from \u00a350,000 to \u00a3250,000, and then a flat rate of 25% for \u00a3250,000 and above.<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n The chancellor commented, “I know the British people don't like tax rises but I also know they dislike dishonesty even more”<\/em>.<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n From April 1st 2021, all rental properties in England must have an electrical inspection<\/a> and valid EICR. <\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n This requirement falls under The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020<\/em> brought in last year. In July 2020, all rental properties with new tenancies required an EICR. From April 2021, this will be extended to all tenancies – new and <\/em>existing. <\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\n Find out more and join in the conversation on our main article: Mandatory Electrical Safety Inspections (EICRs) for Rental Property 2021<\/a>.<\/p>\n \n\n\n<\/p>\n \n\n\n<\/p>\nHow can landlords benefit from Stamp Duty Holiday?<\/h2>\n
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Spring Budget – Reintroduction of 95% mortgages<\/h2>\n
Corporation tax increases<\/h2>\n
What other changes can landlords expect from 2021? <\/h2>\n
Mandatory electrical inspections<\/h3>\n