The government’s highly-anticipated Tax Day was just a damp squib.
That’s the view of leading analyst Anthony Codling, who says the almost complete absence of a property tax overhaul may have been welcome for existing owners but will have been disappointing for many others.
“The Stamp Duty Holiday was launched in July 2020 as a short term policy to kick start the UK Housing market after lockdown and to help, in part, guard against house prices falls. Since Stamp Duty Taxes went on holiday house prices and the levels of public debt has increased significantly” says Codling, who now runs PropTech platform Twindig following a career analysing agencies and the housing market for investment bank Jefferies.
He continues: “Whilst few are fans of paying more tax, there is a time and a place. The pandemic has caused financial hardship for many whilst boosting the asset values of others.
“Tax day coincided with the anniversary of the first lockdown, it was billed as a national day of reflection. In my view, it is a missed opportunity that those who have benefitted over the last year have not been called upon to help those who have not.”
Some 30 tax documents were released by HM Treasury yesterday - a mix of responses to past consultations, proposals going out to new consultations, and updates on ongoing reviews.
The two property-related taxes thought to be likely for major change - Capital Gains Tax and Stamp Duty Land Tax - were left untouched with only a small number of property-related announcements otherwise.
One concerned holiday lets valued as businesses. The government has now pledged to “legislate to change the criteria determining whether a holiday let is valued for business rates to account for actual days the property was rented, following a previous consultation. This will ensure owners of properties cannot reduce their tax liability by declaring that a property is available for let while making little or no actual effort to do so.”
There was a little more detail given about the residential property developer tax announced earlier this month in the Budget. The government said yesterday it would “publish a consultation on a new tax on the largest residential property developers following the … announcement by the Secretary of State for Housing, Communities and Local Government. The tax will be introduced in 2022 to help pay for the costs of cladding remediation.”
There was also confirmation that Inheritance Tax regulations will be simplified later this year so that from January 1 2022 over 90 per cent of non-taxpaying estates each year will no longer have to complete inheritance tax forms for deaths when probate or confirmation is required.