Chancellor George Osborne dismissed one of the biggest fears for landlords by confirming no new property taxes in his Autumn Statement.
Liberal Democrats have campaigned for the introduction of a mansion tax to raise cash of prosperous property owners, but have clearly lost the fight in Downing Street.
Osborne was emphatic – no property tax was on the way and no property tax will be considered on his watch.
Not only is introducing the tax too expensive because the government would have to spend millions on revaluing the nation’s property stock, nut the temptation for future chancellors to dip in to the point could be irresistible, he explained.
The remark was clearly a swipe at any future Labour government that might want to soak richer property owners with a mansion tax.
Other than that, little changes for landlords.
In general terms, landlords will pick up a small tax bonus as rates and allowances rise slightly, but Osborne explained from the start the statement was tax neutral and any gains would simply come as recycled cash from cuts elsewhere.
Several tax thresholds were raised – but the effective dates vary:
- Everyone benefits from the tax free allowance increasing by £1,035 to £9,440 a year from April 2013
- Higher rate taxpayers earnings before paying income tax at 40% rise to £41,865 from April and...
1% more to £42,285 in April 2014.
The annual exempt allowance for capital gains tax (CGT) increases 1% from April to £11,100, while the nil rate band for inheritance tax (IHT) is up 1% in April 2015 to £329,000.
“The government believes that changes to tax and public spending should impact fairly across society,” said Osborne.
“In light of its decision to limit increases in benefits to 1%, and the government’s plans to make public sector pay awards that average at 1%, the government believes it is fair and consistent to limit increases in personal tax thresholds, while continuing to support low and middle income households through the increase in the personal allowance.”©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law; always seek professional advice. Legislation changes, so check dates on these articles. If you have questions go to the LandlordZONE® Forums