The Chancellor has confirmed in his Budget speech that the 3% Stamp Duty surcharge on additional properties is to go ahead next month. There will be no exemption for large-scale purchasers, as had originally been proposed.
In another change, people will now have twice as long as the original 18 months to sell their first property if they have already bought their next home.
Osborne said that the extra Stamp Duty receipts would go toward helping people get on the housing ladder in the south west of England.
There had been speculation that the implementation of the surcharge might have been delayed.
George Osborne also announced reforms to Stamp Duty Land Tax on commercial property, which will kick in at midnight tonight.
He said that the reforms would be similar to those introduced on residential property, meaning that smaller businesses would pay less and larger ones would pay more.
Osborne said: “Just over a year ago, I reformed residential Stamp Duty. We moved from a distorted ‘slab’ system to a much simpler ‘slice’ system. As a result, 98% of home buyers are paying the same or less and revenues from the expensive properties have risen. The IMF have welcomed the changes and suggest we do the same for commercial properties.
“That is what we are going to do, and in a way that helps our small firms.
“At the moment our small firms can pay just £1 more for a property and face a tax bill three times as large – that makes no sense.” From midnight tonight, there will be no Stamp Duty on purchases up to £150,000; a 2% rate on the next £100,000; and a 5% rate on properties above £250,000.
There will be transitional rules for purchasers who have exchanged but not completed before midnight.
Osborne has also announced a new measure to help younger people save. From next April, those under 40 will be able to take out a Lifetime ISA, and save up to £4,000 each year until they are 50, with the Government boosting the pot by 25% – putting in up to a further £1,000 each year.
Savers can, said Osborne, choose whether to use the money to buy their first home or pensions.
Early on in the Budget speech, he made a fleeting reference to two new tax break for people trading digitally, including property. The tax breaks would each be worth £1,000 a year. However, there was no explanation as to what would qualify people to claim these tax breaks, other than Osborne saying that some digital platforms such eBay had helped entrepreneurs start new businesses.