What the Spring Budget means for the prime property market

In his Spring Budget, Chancellor Jeremy Hunt announced a widely-anticipated change to non-dom status (replacing it with a four-year tax break on any overseas income), a reduction in capital gains tax on residential property and the removal of tax breaks for holiday rentals and for portfolio acquisitions. Charlie Wells, managing director of Prime Purchase, comments:

"The Chancellor has really missed an opportunity to increase transactions and boost not only the property market, but the wider economy. If he really wanted to get the economy moving and encourage activity, he should have offered incentives, such as a stamp duty holiday, to encourage people to buy and sell.

"Even if a stamp duty saving is minimal in the grand scheme of things, it gives people more confidence to transact and make decisions. Then, as soon as the house is bought, it makes a big difference to other industries – painters, decorators, builders, interior designers, furniture makers, gardeners, builders’ merchants – it’s not just estate agents and solicitors who benefit from an uptick in property transactions.

"It is unsurprising that multiple dwellings relief is being abolished as it may have been open to abuse in some instances and regarded as allowing wealthy people to get away with paying less tax. However, I am not sure it will make a huge difference to the Chancellor’s tax take as it involves a relatively limited number of deals. Having said that, within an hour of the Budget statement I’d had two clients call me to ask about it so my advice would be to those thinking of utilising this relief to get on with their transaction before 1st June.

"As for the abolition of the current tax system for non doms, this was well trailed before the Budget and is something a Labour Government (should we get one in the foreseeable future, as seems likely) would have done anyway. We await the precise detail to see how this will work in practice."