THE BUDGET AND PROPERTY
Capital Gains Tax
Basic rate taxpayers will pay 18 per cent and higher rate taxpayers 28 per cent. The tax allowance will remain at £10,100. But the gain will be added to an individual’s annual income meaning most people will pay at 28 per cent.
Second-home owners will continue to enjoy generous tax breaks on furnished holiday home lets. The Chancellor scrapped Labour’s plans to abolish the allowances, but rules could be tightened up next year.
VAT will rise from 17.5 to 20 per cent in January and will leave families £500 a year worse off. If you’re planning an extension or refurbishment now is the time to tackle it to avoid the higher rate.
No change to the existing rates at the moment.
These are zero for homes up to £125,000, one per cent for homes between £125,00 and £250,000, three per cent for homes from £250,000 to £500,000 and four per cent for homes over £500,000.
First-time buyers will continue to enjoy paying no stamp duty on homes below £250,000 until March 2012.
The budget confirmed that the new 5 per cent higher rate for properties worth over £1m would be introduced from April next year.
Homeowners’ Mortgage Support.
The government-backed support is available for those in financial difficulty and delays some of the monthly interest payments on a mortgage for up to two years. Plans to reduce the reference mortgage rate for calculating support from 6.08 pc to the Bank of England average mortgage rate 3.9 pc at the moment, may cost vulnerable households £130 a month.