The new Chancellor’s first Budget announcement is scheduled for 11 March. After several changes to taxes, and regulations, over the last few years, what should landlords expect from Rishi Sunak?
What do we know about Rishi Sunak the Chancellor?
39-year-old Rishi Sunak is a man, with charming demeanour, razor-sharp brain, and has brilliant acute financial sense. He is known locally as the ‘Maharaja of the Dales’.
Sunak is the second youngest person ever to take the position in Government.
The 39-year-old is Winchester educated, then went off to Oxford, where he studied Philosophy, Politics and Economics; followed by a Fulbright scholarship to Stanford University. Stanford is a private research university, that ranks as one of the highest in the world.
He then married Akshata Murthy, a glamorous Indian lady whose father is Narayana Murthy. He is the co-founder of multinational IT company Infosys, that is worth close to £2 billion.
The young Chancellor is a multimillionaire; he has worked in California, India and Britain. He was also employed at one time by Goldman Sachs. Mr Sunak then set up his own business in 2010, Theleme Partners, a private investment partnership. He started this company, with an initial fund of £536 million, according to the Daily Mail.
The challenges for the Chancellor
George Osborne said: “I would make this the Budget for Coronavirus. “I would do everything I could to vaccinate the economy against what’s going to happen if we can’t vaccinate people against what’s going to happen.”
As Coronavirus spreads, the Chancellor has had to play catch up. Coronavirus is having a devasting impact on the economy, as the emerging global pandemic spreads.
Rishi Sunak faces a daunting challenge in his new job, as coronavirus spreads, and risks associated with it is intensifying.
What the Budget needs to deliver for the PRS
There is speculation, regarding Stamp Duty that the initial threshold maybe is lifted, to £500,000, this in the wake of the virus, may well now change.
The new change, if introduced, will mean new buyers will pay no stamp duty for purchases less then £500,000. This change to the Stamp duty will be welcome news for the PRS.
The current threshold for stamp duty is £125,000.
Stamp duty rises as the value of the property increases.
The chargeable stamp duty also depends on if the property is a first, second or buy-to-let property.
Landlords currently pay 3% stamp duty, on all investment properties. Purchases above £125,000, the stamp duty goes up to 5% on the remainder of the balance.
A property investor in London Mr Harrison said: “change in the stamp duty is well overdue, this will be a boost to investors like me. We have seen a raft of regulatory and tax changes which are crippling the PRS; we now need a change.”
What can landlords expect in this Budget
With Coronavirus and the devastating impact, this is having in the broader economy. The speculations on what landlords can expect may well change completely. The Government needs money, from somewhere, as the economy weakens. Landlords will be last on the list to receive any help. They may well be the target, for even more taxes.
What the March budget 2020 will hold for landlords, maybe a surprise to all of us.
Mr Sajjad Ahmad the CEO of The British Landlords Association said “We very hope, the Chancellor will make some changes to boost the PRS, however the impact on the wider economy, in months and years to come will be in the negative territory. More money will be required to plug the holes, for our emergency services budget, that money has to come from somewhere. It would not surprise me if investors are hit again, with more taxes.”
Source: British Landlords Association
Author: Marc Attwater
Date: 11th of March 2020