…the likely outcome will be a combination of promised public expenditure cuts, some fancy footwork on tax and some sweeteners in key areas like health..Nick Barnes, Head of Research
With a general election less than six months away, the Chancellor will want to deliver a voter friendly message. However, he is faced with a rising budget deficit and sluggish tax revenue. An additional headache is the anticipated buffeting of the economy, which is already slowing, from a Eurozone going into reverse and the threat of deflation. Consumer confidence has also weakened since the end of August according to GfK.
Given this background, the likely outcome will be a combination of promised public expenditure cuts, some fancy footwork on tax and some sweeteners in key areas like the extra funding for the National Health Service already leaked by the Chancellor: on balance more “carrot” than “stick.” One of the topics currently uppermost in people’s minds is housing. There is a strong sense of déjà vu when it comes to considering the main problems plaguing our housing market: a shortage of housing stock, increasing affordability issues in both the sales and rented sectors and the seemingly inescapable lurching between boom and bust periods.
Whilst not claiming to have a panacea for these ailments, we outline some of the key actions we would like the Chancellor to consider and follow this with what we think he might actually say on these topics.
We have explained in the attached document what we would like to see happen and what the Chancellor might say for the following:
• Support for the private rented sector
• Capital gains tax on non-resident owners of UK residential property
• Stamp Duty Land Tax (SDLT)
• Inheritance tax (IHT)
• Annual Tax on Enveloped Dwellings (ATED)
• Council tax (mansion tax)