The Autumn Budget of 2017 is set
to take place on Wednesday November 22, with the major annual financial update
by Chancellor Philip Hammond switching from the spring.
Here we take a look at what is
potentially on the cards.
Stamp Duty
There has been talk for some time
that Stamp Duty is putting off potential home buyers and movers and therefore
putting pressure on the housing market in the UK. Whereas Stamp Duty income has
reached a record high, home sales have taken a dive. There are therefore calls
being made on the Government to remove Stamp Duty altogether for older
homeowners, with the aim of encouraging downsizing so that larger family homes
are freed up for younger families.
Homebuilder McCarthy & Stone
has recently conducted research revealing that pensioners would be more
inclined to make a move to a smaller property if there was no Stamp Duty to
pay. It is also thought that Stamp Duty has brought higher value sales to a
halt, creating a knock-on effect throughout the remainder of the market.
Nick Leeming is Chairman of
Jackson-Stops. He said: "Philip Hammond must view the property market
through the eye of the homeowner and come up with a solution in the Autumn
Budget.
"If they were to take steps
to reform the impact stamp duty has on the top end of the market, even just
marginally, they would not only see their revenue dramatically increase but it
would also get the market moving again at all levels.”
Alternatively, the liability for
the tax could be switched from buyers to sellers, suggests the AAT (Association
of Accounting Technicians). The AAT says this would boost mobility at all
levels, because people on their way up the ladder would be paying duty on the
lower-priced house that they are selling rather than the one they are buying.
They say it would also give more first time buyers a leg up onto the property
ladder, whilst keeping the Treasury’s income intact.
Phil Hall, head of public affairs
and policy for AAT said: “It’s widely accepted that Stamp Duty adds a burden to
any homeowners seeking to move - especially first-time buyers - because they
must pay the tax as an immediate upfront cost together with finding a deposit,
surveyors and solicitors fees and so on.
"This stunts mobility,
impacting on employment and productivity as well as reducing the supply of new
homes, which adds to the affordability crisis.
"Switching liability to the
seller would be a relatively simple way of solving these problems.”
Pensions
It is thought that pension tax
relief may be under threat. The current system links relief to the income tax
rate of a saver. This means that tax payers in the higher rate band enjoy a 40
per cent relief rate, whilst those on basic ate get 20 per cent.
There is talk of a flat rate of
33 per cent, which means earners in the middle band would be hit harder.
Pensions director at Aegon, Steven Cameron, feels that tax relief should not be
changed until Brexit is done and dusted however, so that savers have some
security for the future. He says that consideration should be given to combining
pension and stamp duty policies instead.
"Reducing stamp duty would encourage pensioners to downsize, freeing up family homes with benefits across the housing market while boosting funds to pay for retirement," he suggested.
It remains to be seen of course
what will actually transpire on 22 November, but rest assured we’ll be
reporting it right here, so keep us bookmarked.
