By Julian Smith, Tax Partner, PKF Francis Clark
As always it was in the last few minutes of his Budget speech that the Chancellor pulled his ‘white fluffy rabbit’ out of the hat.
This time it was the announcement that first-time homebuyers will no longer have to pay stamp duty for properties of up to £300,000.
According to the Treasury, it means that 80 per cent of all first-time buyers will not pay stamp duty, a maximum saving of £5,000 on a £300,000 property.
That’s good news for first-time buyers but, at the risk of sounding churlish, it’s a pity the measure was not extended to all buyers moving up the housing ladder.
Philip Hammond also confirmed the government’s long-term goal is to build 300,000 homes a year by the mid-2020s with £44 billion in government support, including loan guarantees, to boost construction skills.
Rural areas in Dorset are already seeing some major housing developments underway, such as on the outskirts of Wimborne. Expect many more seems to be the message from ministers.
Other measures announced by the Chancellor include:
- The tax-free personal allowance to rise to £11,850 in April 2018 and the higher-rate tax threshold to increase to £46,350
- Tobacco to rise by two per cent above Retail Price Index (RPI) inflation while the minimum excise duty on cigarettes introduced in March will also rise, as will duty on hand-rolled tobacco.
- Duty on beer, wine, spirits and most ciders to be frozen but duty on high-strength ‘white ciders’ to be increased via new legislation.
- Vehicle excise duty for diesel cars that do not meet latest standards to rise by one band in April 2018.
- Local authorities will have the power to charge a 100 per cent council tax premium on empty properties.
More money for the NHS – an extra £2.8 billion – and a £10bn capital investment fund for hospitals is welcome news.
Overall I felt the Chancellor didn’t do a bad job in the circumstances.
As always, the devil is in the detail. Philip Hammond must be praying that, for the sake of his political survival, his Budget is not picked apart in the coming days.
- Julian Smith can be contacted on 01202 663613 or email firstname.lastname@example.org