Press Room.
Grant Thornton gives cautious welcome to Budget's property
changes
If you are writing about the property aspects of today's
budget, please consider the following comment by Marion Cane,
Property Director of Grant Thornton UK LLP
"As anticipated, there were limited aspects in the Budget to
impact the property sector. The vote-winning change giving relief
from SDLT for first time buyers should give a boost to
housebuilders but this will only happen if it is coupled with
increased mortgages available to first time buyers reducing the
cash deposit they have to find.
"In addition, the agreement with Lloyds Banking Group and The Royal
Bank of Scotland to lend £105 billion to homebuyers and businesses
over the next 12 months may help reduce the shortage of credit
available. Of this amount, £41 billion will be targeted at small
businesses and some of this may find its way into the property
sector which has suffered a significant shortfall in financing
resulting from the tightening of bank lending to the sector. Unless
the lending makes its way into the hands of the property sector,
more businesses will fail and the sector will continue to
suffer."
"Another welcome change is the decision to allow REITS to issue
stock dividends in lieu of the cash dividends currently required to
meet the conditions of the regime. This move will be welcomed by
the Real Estate Investment Trusts ("REITs") who have been lobbying
for this change for some time. It is not likely that this measure
will come in until next year which is a disappointment but, when it
does, it will help REITs retain their cash for investment in
growing the business at a time when bank lending is still
tight."
"It is good news that there has been no change to the normal
Capital Gains Tax rate which remains at 18%. The increase in the
lifetime limit to £2 million on accumulated qualifying gains
qualifying for the reduced 10% rate will also be welcomed by
entrepreneurial property traders.
"There were no changes to the rate of SDLT on commercial
property purchases but the Budget did contain measures to clampdown
on SDLT saving schemes in the commercial property sector. One
modest boost to the commercial property businesses that are paying
tax in these difficult times is the increase in the annual
investment allowance for qualifying expenditure on plant and
machinery. The allowance is extended from £50,000 to £100,000 for
expenditure incurred on or after 1 April 2010."
ENDS
For further information, please contact:
Nicola Daley, Grant Thornton press office 020 7728 2244 nicola.daley@gtuk.com