“Chancellor Healey has delivered his first Autumn Budget and the overriding response was that it was distinctly underwhelming, vanilla, if you will,” writes our Director, Trevor Wells.
“We were hopeful for a Budget packed with policies to stimulate growth. Instead, we were left with a mixed picture and the sense of missed opportunity.
“Let’s start with the positives. Capital Gains Tax (CGT) rates were unchanged, providing welcome news and some reassurance for investors, entrepreneurs and business owners. A further £1bn was announced for the Social & Affordable Homes Programme, bringing more certainty for the sector. And further details on Your First Home, the scheme to encourage first-time buyers onto the property ladder, was revealed.
“Despite these announcements, the Budget fell short on delivering effective action to stimulate the housing market. The price caps on Your First Home, announced last week, are widely viewed as too restrictive, and this combined with the rise is interest rates, means continued pressure on affordability and therefore increasing challenges for developers.
“There were also changes to Business Asset Disposal Relief, including a reduction in the lifetime limit from £1m to £550,000. This move could have significant implications for those looking to sell or exit their investments.
“Finally, a Founders Relief was introduced, offering a 10% CGT rate on up to £10m of qualifying lifetime gains for founders of high-growth businesses. However, this excludes land dealing and property development companies, meaning landowners and entrepreneurs cannot benefit from a relief that is designed to recognise the risk that underpins the development process.
“For advice on what the Budgets changes mean for your land or development portfolio, please get in touch.”
