Philip Hammond's Budget didn't contain substantial surprise for the Real Estate sector and mainly focussed on housing, with some support for the high street.
Below are the headline areas of impact. A full copy of the Budget can be found here. The BPF response can be found here.
- Business rates will be cut by one third for retail properties with a rateable value below £51,000 for a period of 2 years from April 2019. The government claims that this will benefit up to 90% of retail properties, but it still doesn't address the problem for the larger occupiers. A £675m Future High Streets Fund has been put aside to support sustainable transformation of the high street.
- Consultation on making sure that second properties used for self-catering and holiday-lets have the appropriate tax applied to address concern that they will be counted as businesses and have inappropriate relief applied.
- First-time buyers relief in England and Northern Ireland is to be extended so that all qualifying shared ownership property purchasers can benefit, backdated to 22 November 2017 with the ability for refunds to be claimed.
- Consultation on a 1% SDLT surcharge for non-residents buying residential property in England and Northern Ireland to be launched in January 2019.
- Subject to consultation, from April 2020, CGT private residence relief will only apply where the owner of the property is in shared occupancy with the tenant.
- Consultation launched on new permitted development rights to allow upwards extensions above commercial premises and residential properties, including blocks of flats, and to allow commercial buildings to be demolished and replaced with homes.
- Simplification of the process for setting a higher zonal Community Infrastructure Levy in areas of high land value uplift and removing all restrictions on Section 106 pooling towards a single piece of infrastructure.
- New five-year strategic business plan for Homes England to be published on 30 October 2019.
- Various funding packages released to deliver new homes and support house-builders and housing associations with the Housing Infrastructure Fund increasing by £500m to £5.5bn.
- Housing Revenue Account cap controlling local authority borrowing for house building to be abolished from 29 October 2018 in England, enabling Councils to increase house building to around 10,000 houses per year. The Welsh Government will be doing similar.
- £8.5m of support for up to 500 parishes to allocate or permission land for homes sold at a discount, with the government exploring how it can empower neighbourhood groups to offer these homes first to people with a direct connection to the local area.
Enterprise taxes/Capital Allowances
- New non-residential structures and buildings to be eligible for a 2% capital allowance where all the contracts for the physical construction works are entered into on or after 29 October 2018.
- The Annual Investment Allowance for all qualifying investment in plant and machinery, made on or after 1 January 2019 until 31 December 2020, will be increased to £1m.
- Enhanced Capital Allowances will be extended for companies investing in electric vehicle charge points to 31 March 2023.
- Objective for CPIH to become the government's headline measure. Use of RPI to be reduced where practicable.
- Private Finance II will no longer be used for new projects. A new centre of best practice in the Department of Health and Social Care will improve the management of existing PFI contracts.
- Following on from the Future Telecoms Infrastructure Review, money is now being released to projects supporting full fibre internet in rural locations and consultations will take place to mandate gigabit-capable connections to new-build homes and speed up the delivery of upgraded connections to tenants.
- Refreshed Northern Powerhouse Strategy to be published next year, with a further £37m to support the development of Northern Powerhouse Rail.
- Aimed at reducing VAT fraud in labour provision in the construction sector, the government has confirmed that from 1 October 2019 it will introduce a domestic reverse charge to prevent VAT losses when traders collect VAT on their sales but go missing before passing that VAT on to HMRC, shifting responsibility for paying VAT along the supply chain.
- From April 2020, a new 2% tax on the revenues of certain digital businesses with the aim of ensuring that the amount of tax paid in the UK is reflective of the value the business derives from UK customers.
- Government to launch a geo-spatial Digital National Asset Register to enable better management and commercialisation of its £420bn property assets.