This year, the Queen’s Speech and the chancellor’s budget announced upcoming legislation that will affect how immigration, council tax and housing work in the UK. While some of the exact details will remain unknown until the relevant bills are made public, the important changes already detailed will have a significant impact on first-time buyers, homeowners, tenants and landlords alike.
As a small business owner, especially if your business is operating in real estate sector, you need to be aware of the changes in legislation which can greatly impact. Perhaps the most interesting impact is the reduced corporation tax rate of 20%, which will greatly benefit not only property companies, but also other UK companies in general.
Prime Minister David Cameron claimed that the new immigration bill, announced in the Queen’s speech, will form the “centre piece” of the coalition’s plans for the years ahead. Under new rules, illegal immigrants will be unable to attain a UK driving license, while businesses found to be making use of illegal employment will face larger fines and charges.
Another important change will see the government make private landlords accountable for checking the immigration statuses of their tenants. Since the announcement of this scheme however, it appears that these changes will only target specific areas, such as Ealing, Hounslow and other regions in the west of London. It remains to be seen exactly which areas will be affected by the proposed changes, though the intention is to prevent illegal letting in high-risk areas, without saddling private landlords with unnecessary increases in red-tape.
Housing and the Housing Market
The right to buy and right to acquire schemes are also being extended. Eligible tenants who have lived in council housing, or a property rented from a public sector landlord, for at least 5 years, can receive up to £75,000 (or up to £100,000 in London boroughs) of discount when purchasing the property they have lived in. Once the proposed Deregulation Bill comes into force however, the minimum time that tenants must have lived in a property to be eligible for such schemes will drop to 3 years.
A second major facet of the 2013 budget, with regard to housing, is the implementation of a “Help to Buy” scheme. Equity loans will be made available to anyone looking to move up the property ladder; these could be worth up to 20% of the property’s value, provided it costs no more than £600,000, and are interest-free for the first five years. The government will also provide a mortgage guarantee to lenders offering mortgages to buyers who have difficulty raising the necessary deposit.
Council and Corporation Tax
The government also offered grants to councils who opted to freeze council tax rates within their area, which led to around 230 councils announcing their plans to do so over 2013/2014.
Changes to income and corporation taxes will also have an effect upon buy to let and HMO landlords, who, along with other taxpayers, will earn their first £10,000 tax-free from the 6th of April, 2014. Property companies, with other small businesses, will benefit from a reduced corporation tax rate of 20%, from the 1st of April, 2015.
These facts and figures, then, will be important to bear in mind when budgeting for yourself or planning for your business. Keeping on top of these changes will prevent you from falling foul of shifting regulations, and allow you to capitalise on the new support for corporations and home-owners alike.