Budget 2020: What Rishi Sunak’s announcement means for property

Budget 2020

Chancellor Rishi Sunak stepped up to the despatch box this afternoon to deliver his first budget, less than a month into the job. With the main focus centred around mitigating the effects of coronavirus, little was said about housing.

The budget did include new taxes for overseas property buyers, funding to remove unsafe cladding, further spending on new homes and money to tackle homelessness.

The Chancellor also trailed a new planning white paper, which promised to “bring the planning system into the twenty-first century”.

Tax hike for overseas buyers

People from overseas buying a property in the UK will now have to pay an additional two per cent stamp duty. 

Previously, non-resident buyers have been subject to the same stamp duty rules as buyers living in the UK, ranging from 0 per cent for properties costing less than £125,000 up to 12 per cent for homes over £1.5 million.

The introduction of a surcharge for overseas buyers will bring the UK in-line with many other global property markets. The new tax for foreign buyers is expected to affect 70,000 of the UK’s total 1.2 million annual property transactions.

Unsafe cladding

Wednesday’s budget also confirms an additional £1 billion allocated for the removal of unsafe cladding from buildings taller than 18 metres. 

The Government pledged £400 million in 2018 for the removal of Aluminium Composite Material — the type used at Grenfell Tower.

Extension of the Affordable Homes Programme 

The Chancellor has also announced a new £12 billion multi-year extension of the Affordable Homes Programme.

This boosts the current programme up £3 million which was put in place in 2016 and is due to end in 2021. The funding is used to support housing associations and to encourage developers to build new affordable housing.