Lost in the noise of yesterday’s social care announcements, Chancellor Rishi Sunak has named October 27 as his next Budget Day - and the time that announcements about future property-related tax changes are most likely to be made.
On the same day there will be a three year spending review, work for which has already started - Sunak yesterday asked all government departments to identify at least five per cent savings and efficiencies from their day-to-day budgets for unspecified reinvestment elsewhere.
In addition, it was announced yesterday that there would be a 1.25 per cent rise in National Insurance from April 2022 and a tax on share dividends will also go up by 1.25 per cent; these would become a separate tax on earned income from 2023 - all of these would be used to generate revenue for the government’s social care reforms.
At the last Budget in the spring, and at a so-called ‘tax day’ of announcements shortly afterwards, it was anticipated that there may be changes to property taxation.
Those changes did not materialise - it is thought because the government waned to wait until the worst of the pandemic ended - but analysts suggest changes may occur this time round.
The two changes considered most likely earlier this year were:
- enacting the recommendations of the Office for Budget Responsibility on Capital Gains Tax, aligning CGT rates more closely to income tax or restricting the range and value of exemptions;
- replacing the outdated and unpopular council tax with an annual tax based on property value (some analysts have suggested that stamp duty could be abolished as a separate charge and integrated into this annual tax as well).
Yesterday the Chancellor announced that on October 27 the government would update the country on all aspects of its so-called Build Back Better programme, including housing.
Sunak himself says: ”At the Spending Review later this year, I will set out how we will continue to invest in public services and drive growth while keeping the public finances on a sustainable path.”