What’s on Ringley’s Budget wish list?

New Chancellor Rishi Sunak delivers his first budget tomorrow. Here are the issues that Ringley Group MD Maryanne Bowring is hoping he will address.

Tax breaks for those supporting housing provision

  • Re-zoning for all our ailing high streets and government investment in master planning to promote housing, Planning Development rights and subsidies or business rates linked to turnover (aka turnover rates) to encourage leisure, cafe and restaurant businesses back into town centres.
  • Capital gains tax breaks for those who choose to sell properties to tenants.
  • Acknowledgment that private landlords are contributing to housing supply.  Allow interest deductions on borrowings to be fully relievable where homes are built or created by intensifying the use (sub-dividing a larger property), or extending a new property – thereby supporting landlords who have created new supply by bringing new dwellings into Council Tax
  • Refund, by way of a tax credit, the 3% Stamp Duty Land Tax surcharge payable by those who own multiple properties if and when the property purchased is converted, extended or remodelled and assessed by Council Tax authorities to comprise new dwellings
  • Enable schools to offer four-year apprenticeship schemes from age 14 as an alternative to GCSEs. This would help keep up with the need to employ one new construction professional every 77 seconds to meet the UK’s housing and infrastructure needs.
  • Give councils the ability to issue ‘sell or develop orders’ on empty homes.
  • Make rent-to-buy dwellings a planning sub-set of affordable housing, with restrictions on sale of such schemes so that homes may only be sold to persons who have rented in the development for two or more years and so that the entire building may only be sold to a rent-to-buy investor.
  • Banks to increase the availability of development finance for modern methods of construction (such as modular and turnkey housing) for new homes – where the loan security effectively sits in the factory or the balance sheet of the modular supplier not the developer – otherwise the only modular developers will be those who can build their own factories, the government, Housing Associations and those who are funded by bonds or capital houses.
  • Tax breaks for developers building or converting buildings via change of use, and where there is a long-term environmental benefit, ie the standing asset is actively emitting oxygen and features, for example, green walls plus zero vat for service charge payers thereafter on green wall maintenance.
  • Restore equality for property versus other assets.
  • For domestic buyers only, make stamp duty a vendor cost not an acquisition premium.
  • Reimagine planning as a service: set a range of realistic time-based planning targets based on scheme size and mix, more funding for planning departments who meet reasonable time targets, and sanctions on those who don’t. 
  • Align Capital Gains Tax on residential property, which for individuals is subject to 18% and 28% tax rates, when other asset classes are subject to just 10% and 20% rates
  • Increase stamp duty for overseas buyers.

In addition to these points, which are directly related to our sector, we would also like to see the Chancellor take broad action on climate change. As Greta says… if there is something wrong with your house then you fix it, so we need to go further to address climate change. 

We call for:

  • A new specialist ‘climate survival’ government department that draws upon the skills of the Trading Standards and the Environment Department.
  • A national business index that measures the carbon footprint of every business, perhaps a banding system like EPCs, per industry classification tax breaks on e-business and other initiatives that reduce the carbon footprint/raise the business rating.
  • Abolish farmland set-aside subsidies and boost home grown food.
  • Address the supply chain to take plastic out of the shops, set a date for plastic bottles to be eliminated in the UK and tax plastic toys while giving tax breaks on sustainable toys.
  • Create a measure to calculate excessive packaging and fine companies that exceed the criteria.
  • Change the BREAM points-based new building system to have non-negotiable red lines on either wind or solar power provision and 100% e-charging car points.
  • Financial incentives to retro-fit and upgrade our housing stock via tax relief, for both homeowners and landlords who invest in energy efficiency improvements to our aging housing stock – subject to such improvements bringing the property up to a grade B or improving the property by 3 bands as evidenced by an updated EPC. 
  • A national messaging campaign to clearly demonstrate how the government is (a) rewarding climate-responsible homeowners and landlords, and (b) is sending clear messages to industries that are not adapting and adopting pro-climate ways of operating that they will face phased-in higher taxation.  Let the UK set an international example; a bi-product result will be a boost to domestic industry.

Finally, we fully support the First Homes scheme with its 30%  lower deposit and mortgage requirements for local first-time-buyers, favouring veterans and key workers including nurses, police officers, and firefighters.  We also agree with legislation to enforce the rule that such properties can only be sold to first time buyers, with restrictions at land registry to prevent re-sale to persons who do not similarly qualify.  Such a scheme may only apply to new build properties at the outset but to enable re-sales necessarily will encompass second-hand stock.

We await the outcome of the Budget with interest. Despite the economic problems that we expect to face in the months to come as a result of the Coronavirus, we believe the new Chancellor has an opportunity to act with imagination and creativity, as well as with fiscal rigour, to tackle the issues we outline above.