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2016 Budget and property

2016 Budget and property

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In this week’s budget George Osborne announced Capital Gains Tax (CGT) rates are to be reduced from April 2016, and other measures that will affect those with property and those saving to buy property.

Capital Gains Tax rates will be cut from 6 April 2016, but residential property will still be taxed at current rates. 

From April 2016, the higher rate of CGT will be cut from 28% to 20% and the basic rate from 18% to 10%. There will be an additional 8 percentage point surcharge to be paid on residential property. 

Capital Gains Tax on residential property does not apply to your main home, only to additional properties for example a holiday home or buy-to-let. 

So this means any landlords wishing to sell their investment property will continue to pay the same rate of CGT on any gain made on the sale, as they would have done pre-Budget.

Stamp Duty (SDLT) 
Other changes affecting property finances have been announced in previous Budgets and Autumn Statements by the Chancellor, such as a 3% stamp duty surcharge on buy-to-let properties and second homes from 1 April 2016. 

However, the grace period during which those who have an overlap between two properties can claim a refund on the higher rates has been extended to 36 months. That means that people who end up with two homes but are trying to get rid of one will get some breathing room. 

SDLT payable as % of purchase price from 01 April 2016 

Purchase price £

Residential purchase

2nd home / buy-to-let purchase

0 - 125k



125,001 - 250k



250,001 - 925k



925,001 - 1.5m






No Help-to-buy ISAs after November 2019 

Those already saving into a Help-to-buy ISA will be able to continue to save into it for now. But from April 2017 it seems the Government will expect savers to put new savings into the Lifetime ISA instead.

From April 2017, any adult under 40 will be able to open a new Lifetime ISA and save up to £4,000 in it each year. Savers will receive a 25% bonus from the government on this money. Money put into this account can be kept until savers are over 60 and used as retirement income, or withdrawn earlier to help them buy their first home. 

Business Rates 
From April 2017, small businesses that occupy property with a rateable value of £12,000 or less will pay no business rates. Currently, this 100% relief is available if a business occupies a property (e.g., a shop or office) with a value of £6,000 or less. There will be a tapered rate of relief on properties worth up to £15,000. This means that 600,000 businesses will pay no rates. 

New stamp duty rates for commercial property 
The way stamp duty on freehold commercial property and leasehold premium transactions is calculated will change. Currently, these rates apply to the whole transaction value. From 17 March 2016 the rates will apply to the value of the property over each tax band. 

The new rates and tax bands will be: 
0% for the portion of the transaction value up to £150,000; 
2% between £150,001 and £250,000, and 
5% above £250,000. 

Buyers of commercial property worth up to £1.05 million will pay less in stamp duty. 

Stamp duty rates for leasehold rent transactions will also change, with a new 2% stamp duty rate on leases with a net present value over £5 million. 

Commercial property in Suffolk
Commercial property in Essex 
Homes for sale in Suffolk
Homes for sale in Essex 

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