The Chancellor George Osborne delivered his eighth budget yesterday. As with most budgets, it had its share of good and bad news for everyone.
Headline-grabbing announcements included plans to tax sugary drinks and longer school days, but there were a few more interesting announcements hidden in there which you may have missed.
Here is our selection of Budget 2016 highlights.
According to government statistics, 150,000 have taken advantage of Help to Buy loan and mortgage guarantee schemes, and 350,000 first time buyers have opened Help to Buy ISAs.
The Lifetime ISA will give younger people the ability to save for the long term. It will ensure that they do not have to choose between saving for their first home, or for their retirement.
From 6th April 2017, any adult under 40 can open a Lifetime ISA.
They may save up to £4,000 each year, receiving a 25% bonus from the government for every pound saved.
Contributions (with government bonus) may continue to age 50.
Money can be withdrawn to buy a home with the government bonus after 12 months of opening the ISA.
Withdrawals for retirement can be made from age 60.
A limit of £450,000 will be set for the value of properties that may be bought with Lifetime ISA monies.
Help to Buy ISAs will be available until November 2019. Before then, people may have both a Lifetime ISA and a Help to Buy ISA. The government’s bonus will only apply to one account.
From the 2017/2018 tax year, those with a Help to Buy ISA can transfer their savings to the Lifetime ISA. They may also contribute up to £4,000 that year in addition to existing savings.
Ad-hoc withdrawals for other purposes are allowed but subject to fees and forfeiture of accrued interest and growth.
Starter Homes Land Fund Prospectus
Local Authorities will be invited to access £1.2 billion of funding to repurpose brownfield land for housing.
Planning system overhaul
The government says it has committed to deliver 400,000 affordable homes by 2020/2021 without sacrificing green belt land.
A “more zonal and red line planning approach” has been declared. Local Authorities will be allowed to signal development strategies from the outset and make full use of “permission in principle” to give early certainty and reduce the number of planning stages for property developers.
Measures will be introduced to speed up the planning system by 2017.
Reduced restrictions for mobile telecoms masts
Planning restrictions will be reduced for mobile telecoms infrastructure, and taller ground based masts may be built.
Unlocking public sector land
Local Authorities will work with central government to release public sector land for 160,000 new homes.
Network Rail will be working with other bodies to provide additional land around stations.
Garden towns, cities and villages
Technical and financial support will be given to areas looking to develop garden villages and market towns of between 1,500 and 10,000 homes.
Legislation will be passed to make it easier for Local Authorities to work together on these projects. There will also be consultation on additional Compulsory Purchase Order reforms. The intention is to make the process clearer, fairer and quicker.
Stamp Duty on additional properties
From 1st April 2016, SDLT for purchases of additional UK residential properties (i.e. second homes, and buy-to let investments) will be 3% above current rates.
To assist anyone moving in difficult circumstances purchasers will have 36 months to claim back SDLT paid during an overlap or gap of ownership of their main residence.
No exemptions will apply for either individual or corporate purchasers.
Commercial property Stamp Duty
Tax will be cut for many businesses purchasing commercial property.
Rates will be reformed to a slice system. This means SDLT will only be payable on the portion of the property value falling within a particular band.
The new rates are:
|Property Value||SDLT rate|
|£0 – £150,000||No SDLT payable|
|£150,001 – £250,000||2%|
All freehold and lease premium transactions will pay the same, or less in SDLT.
New rate for leasehold rent transactions above £5 million
2% will be charged on leasehold rent transactions over £5 million.
Everything below is unaffected.
All the commercial property stamp duty changes are effective from 17th March.
There will be a clamp down on nuisance Claims Management Companies.
The amounts they charge are set to be capped, and a there will be a review of regulations.
Regulation will be passed to the Financial Conduct Authority.
Managers of CMCs will also be held personally accountable for unscrupulous and illegal actions.
The 2015 Autumn statement announced that an apprenticeship levy would be introduced in 2017.
Employers committed to training will get out more than they put in.
From April 2017, English employers will receive a further 10% top-up of levy contributions. This is to fund apprenticeship training through their digital account.
Parents in employment
As previously reported, consultations on extending shared parental leave to grandparents will commence in May 2016.
There will be a review of ways to support parents choosing how and when to return to work.
From early 2017, tax-free childcare will be introduced to help parents wanting to work, or increase the hours they work.
This will work alongside free child care entitlements.
From September 2017, free entitlement for families with 3 and 4 year-olds will double from 15 hours to 30 hours.
There will be a review of salary sacrifice schemes, and potentially limits on the range of benefits with NIC and tax advantages.