George Osborne’s Autumn Statement contained a number of measures that will impact on farmers, landowners and rural communities.
Here’s a summary of the main changes to be aware of:
Stamp Duty Land Tax increases on second homes and buy to lets
From April 2016, an additional 3% will be charged on purchases of additional residential properties above £40,000, such as buy to let properties and second homes. This will have a significant impact on those looking to buy second homes. For example, the purchase of a £300,000 house would attract stamp duty of £14,000, rather than the £5,000 it would currently. The higher rates will not apply to purchases of caravans, mobile homes or houseboats, or to corporates or funds making significant investments in residential property.
Commitment to build new affordable homes
The chancellor has committed to building 400,000 new affordable homes over the course of this parliament. 200,000 of these will be starter homes with a further 35,000 Help to Buy properties. Crucially, the government is looking to remove the constraints that prevent private sector organisations from participating in these programmes and bidding for funding. This should make it easier for landowners looking to bring forward land for residential development to gain planning permission.
Averaging for farmers extended to five years
Following the consultation announced in the budget in March 2015, the averaging period for self-employed farmers will be extended from two years to five years as of April 2016. In other words, farmers will be able to choose whether to average profits over a two year period or a five year period.
Package of support for rural communities
The chancellor announced a number of measures that will support rural businesses and communities, including extending the doubling of small business rate relief (SBRR) for another year to April 2017. The government will also explore setting up a new broadband investment fund to provide more funding to alternative network developers. Mr Osborne also announced the creation of 26 Enterprise Zones, including 15 in smaller towns and rural areas, as well as a £40m boost to the Discover England Fund to support the tourism industry.
Reform of Renewable Heat Incentive
The chancellor wants to make £700m of efficiency savings from the Renewable Heat Incentive (RHI) over the next five years, though he suggested that overall funding will increase. Therefore it’s expected that some of the eligibility criteria and the structure of the scheme may change. Given that the RHI has played a vital role in allowing many with rural homes to invest in better performing renewable heating technology, property owners should be aware of any possible changes in eligibility and funding criteria.
If you would like to know more about how the summer budget changes might impact on your property or business, please call Julie Liddle on 01768 254 354.