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By Graham Norwood

Editor, EAT, LAT & LLT

Graham Awards


The Coming ‘Budget’ - What’s In Store For Agents?

If you want to sex-up the Chancellor’s financial statement scheduled for lunchtime on Wednesday, you’d call it a Budget or a Mini-Budget. But it’s not that at all, really.

It’s something less dramatic in terms of process - an annual Spring Statement, previewed back in November by Rishi Sunak himself as being the unveiling of big picture financial concepts outlining “a new economy post Covid…fit for a new age of optimism”.

But between then and now there came, well, a lot of stuff. Inflation running at seven per cent and more, Brexit-fuelled staff shortages last Christmas, the more-severe-than-expected spike in the energy price cap, concern over the cost of living, and the war in Ukraine. Oh, and in case you haven’t noticed, Covid isn’t quite ‘post’ yet, even if the worst of its effects are almost certainly behind us.


How optimistic do you feel about things now, Chancellor?

Sunak has himself indicated that this coming statement is going to be a tough one to spin as good news, with vigorous denials of a reversal of the National Insurance tax hike.

Indeed, business consultancy Hargreaves Lansdown has said the NI issue would be just one of eight - yes, eight - tax rises coming our way this spring, irrespective of Sunak’s measures on Wednesday.

The other seven are achieved largely by stealth - frozen thresholds for income tax, Capital Gains Tax and inheritance tax; then there’s rising council tax everywhere, an increase in dividend tax, more VAT being paid because of inflation, and rising house prices meaning more stamp duty for those moving right now.

These already add up to UK adults having the largest tax burden since the 1950s, so unsurprisingly the crystal balls of the economic pundits suggest that Sunak is aching to deliver some measures to help with the cost of living crisis, especially fuel.

It’s conceivable - just about - that he could cut fuel duty, delay or scrap the National Insur-ance hike, rescind last year’s freezing of tax thresholds set out above, or even levy a windfall tax on oil companies.

So are new property taxes off the agenda? My guess is probably yes, simply because Sunak may feel that his smiling image cannot sustain the delivery of still more bad news in the shape of higher direct taxes.

But there are indirect ones, and if there IS to be anything extra loaded on property, watch out for…

1. Net Zero: many environmental groups have lobbied for stamp duty to be incentivised towards the purchase of homes with ‘better’ EPCs. The arguments are familiar enough, and their lettings sector equivalents are already having a big impact in terms of landlords being clobbered. Might taxes try to persuade buyers to go eco?

2. Wooing The Renter Vote: the Conservatives are every bit as keen as Labour to win over the Generation Rent constituency, so while it appears the long-awaited Renters Reform White Paper still isn’t quite ready, there are likely to be nods towards it on Wednesday. For example, there may be the allocation of Levelling Up funds to key locations with high volumes of renting, to give councils cash to spend on enforcement and new licensing schemes. Blackpool was one example of this just a few days ago.

3. Financial Help for the Fuel-Poor: This will apply to those with low or no incomes and in areas considered to have low levels of energy efficiency - and the stats suggest that a significant number of these live in the private rental sector. Don’t rule anything out as the government struggles against escalating costs, and that might mean penalising landlords indirectly if it helps the prospective Conservative renter voters.

4. Stiffer Anti-Money Laundering Regime: while the Ukraine conflict still dominates the news agenda, this issue will not go away. Sunak has directly been leant on by his EU and US counterparts to stop London being the location of choice for those with dirty money, and while some cleansing has happened in recent weeks the government believes - for good or bad - that plenty more needs doing.

All this remains, of course, pure speculation, but ironically if any extra tax burden does come our way it may be down in part to the success of another of Rishi Sunak’s initiatives - the stamp duty holiday.

The momentum built up by this is still helping push house prices even higher - expect some VERY punchy Rightmove figures to demonstrate this on Monday.

With home owners’ assets appreciating so much, they might prove an irresistible target for a Chancellor needing every penny he can lay his hands on. Full coverage of the statement will appear on Estate Agent Today on Wednesday afternoon. Until then…

*Editor of Estate Agent Today, Letting Agent Today and Landlord Today, Graham can be found tweeting about all things property at @PropertyJourn


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