Grant Thornton's Property Sector Budget Predictions
Following the announcement of the Budget date,
Grant Thornton's Head of Property, Clare Hartnell
says:
"For most parts of the property sector, the
Budget in unlikely to be earth shattering but we may see measures
to benefit the private rented sector brought forward. The
Government needs to address the shortfall of financing available in
this sector given that the banks have significantly tightened the
availability of credit. Businesses have needed to consider
alternative methods of finance in these difficult times. If the
Government fails to acknowledge this issue, more property firms
will fail and the sector will continue to suffer.
"In addition there may be changes around stamp
duty land tax (SDLT) and targeted anti-avoidance measures but these
are likely to be modest."
More detail on the predictions is set out
below:
Top Budget predications affecting
the property sector:
1. Increase in
SDLT
"The Chancellor might increase SDLT, perhaps
introducing a further higher threshold on both commercial and
residential properties, but I suspect any such change will be
modest. This could be coupled with further anti-avoidance
provisions to tackle tax planning in the SDLT area aimed at known
avoidance schemes."
2. Help for the private rented sector
"On the positive side, there is a current
consultation on possible measures to help stimulate the private
rented sector. This is set to close in April 2010 but it is just
possible that the Government might look to bring these
forward earlier as a possible vote winner. This could mean more
favourable SDLT rules on the purchase of housing portfolios and
other measures to encourage housing real estate investment trusts
(REITs)."
3. Increase in anti-avoidance
measures
"I am expecting the Government to introduce
further anti-avoidance measures including, more stringent
requirements for tax advisers to inform HM Revenue & Customs
(HMRC) of clients who adopt more aggressive planning measures."
4. Corporation tax rate to remain the
same
"It is unlikely that the corporation tax rate
(mainstream or small company rate) will change in this Budget. The
small companies' corporation tax rate is expected to remain at 21%
with the planned increase to 22% delayed until 2011/12. However,
after the election we may see corporation tax rates fall."
5. Increase in housing information
pack administration
"I am concerned that the Government will
expand the information required for housing information packs
(HIPs). There is already quite a significant amount of information
that is needed to produce these information packs and so any
increase would be an unwelcome additional burden on all
concerned."
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For further information, please contact:
Nicola Daley, Grant Thornton Press Office: on 020 7728 2244 or
nicola.daley@gtuk.com