Budget 2012

George Osbourne announced a rise in the level of stamp duty to 7% for homes valued at more than £2 million in The Budget 2012. Any such homes bought through companies will have to pay 15%.

The coalition Government also pledged in the Budget 2012 to provide extra funding to help construction firms building new homes.

Other key points from The Chancellor's speech included:

  • OBR revises up UK growth forecast for 2012 to 8% from 7%. Growth expected in 2013 is 2% and 2.7% in 2014;
  • UK inflation forecast to fall from 2.8% to 1.9%;
  • Personal income tax rate raised to £9,205 from April 2013 making 24 million people £220 better off including the higher income tax bracket;
  • 50p top tax rate reduced to 45p;
  • Higher tax band threshold reduced from £42,475 to £41,450 during over 300,000 more people into the higher tax bracket;
  • Age-related tax benefits will be removed for new pensioners from April 2013 and replaced with the same allowances as the rest of the population which is estimated to leave the average pensioner £83 worse off. Allowances for those already of pension age will be frozen;~
  • In households where someone earns over £50,000 child benefit will be reduced by 1% per £100 earned above £50,000. Anyone earning over £60,000 will lose their entitlement to receive Child Benefit;
  • Corporation tax dropped to 24% and by 2014 will be lowered to 22%;
  • Relaxation of Sunday trading laws during the Olympics and Paralympics starting 22nd July;
  • ersonal tax statement to be sent to over 20 million tax payers starting April 2014.

James Kersh, director at Sutton Kersh commented, “ There is nothing in the budget that will harm the property market, but there is also little included that will really help the market either. I am disappointed to see Stamp Duty changes focusing on the top end of the market – what about providing some tax relief for first-time buyers. Movement at the bottom end of the market will provide greater momentum to the rest of the market. I would also have liked to have seen the Chancellor address the current barriers to property investment, particularly the tight lending restrictions imposed by Banks.”

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