Lifetime ISA: a new £4,000 ISA that you can use to save for retirement or to buy your first home
From April 2017, any adult under 40 will be able to open a new Lifetime ISA. Up to £4,000 can be saved each year and savers will receive a 25% bonus from the government on this money.
Money put into this account can be saved until you are over 60 and used as retirement income, or you can withdraw it to help buy your first home.
The total amount you can save each year into all ISAs will also be increased from £15,240 to £20,000 from April 2017.
HS3 between Leeds and Manchester
£60 million has been announced to develop plans to cut journey times to around 30 minutes between Leeds and Manchester, as well as improving transport connections between other cities in the north.
£80 million to give Crossrail 2 the go-ahead
This will be used to continue planning for Crossrail 2. The proposed Crossrail 2 route will connect South-West and North-East London, increase tube capacity and reduce the pressure on Victoria and Waterloo stations.
Capital Gains Tax rates will be cut from 6 April 2016, but residential property will still be taxed at current rates
Capital Gains Tax is a tax on the gain you make when you sell something (an ‘asset’) that has gone up in value. It is paid at a basic or higher rate depending on the rate of Income Tax you pay.
From April 2016, the higher rate of Capital Gains Tax will be cut from 28% to 20% and the basic rate from 18% to 10%.
There will be an additional 8 percentage point surcharge to be paid on residential property and carried interest (the share of profits or gains that is paid to asset managers).
Capital Gains Tax on residential property does not apply to your main home, only to additional properties (for example a flat that you let out).
New stamp duty rates for commercial property from 17 March 2016
The way stamp duty on freehold commercial property and leasehold premium transactions is calculated will change. Currently, these rates apply to the whole transaction value. From 17 March 2016 the rates will apply to the value of the property over each tax band.
The new rates and tax bands will be 0% for the portion of the transaction value up to £150,000; 2% between £150,001 and £250,000, and 5% above £250,000.
Buyers of commercial property worth up to £1.05 million will pay less in stamp duty.
Stamp duty rates for leasehold rent transactions will also change, with a new 2% stamp duty rate on leases with a net present value over £5 million.
For the full list of announcements click here.
Adrian Gill, director of estate agents Reeds Rains, comments: “The next generation of Britons looking for a home do indeed face a cocktail of risks. From a property purchase market where canny sellers secure nearly ten percent more than a year ago, from drastically insufficient house building across the UK – and from rents increasing at ten times the rate of CPI inflation. In a sellers’ market we need a builders’ generation.
“Supply of housing should be priority number one. And for that reason, political punishment for professional landlords offering quality homes to rent should be nowhere on the agenda.
“Help to Save is a welcome addition to Help to Buy. New rail lines and faster internet are brilliant ambitions. Jobs and wage growth are vital. But if there are not homes to live in, very little of this will be helpful – or affordable for the next generation. We still need detail on planning reforms, but these changes should be truly sweeping to have a radical impact for anyone struggling to buy, or struggling to rent.
“In the UK, tackling productivity weakness means tackling housing supply. Drag from the financial crisis is being replaced by drag from serious and permanent problems with housing and infrastructure. The next generation needs homes. This generation needs to start building them. And the government must avoid making it harder for people to live in them as tenants.”