Norman Bartholomew’s Property, Business And Life Blog

Darling of a budget for property investors?

One would have thought that yesterday’s Budget should have been the defining moment in Alistair Darling’s political career – a chance to firmly stamp his own mark on the UK economy in his role as Chancellor by doing the right thing for the economy and in particular the property market, but sadly it was not to be. Predictably, he centered on tweaking existing policies relating to cigarettes, alcohol and the environment rather than focusing on the credit crunch crisis, consequent property market slowdown and the confusion over forthcoming Capital Gains Tax changes, factors that are ultimately driving us towards a recession.The Northern Rock fiasco has severely knocked public confidence in what until recently had been thought of as safe and reliable financial institutions.

It’s difficult to know if the government really has got its finger on the pulse after taking so long to realise the scale of the Rock’s problems. The whole thing could possibly have been avoided if government action had been taken much earlier.It seems as though the government is still living by its ‘Things Can Only Get Better’ mantra, although after a decade of power this is starting to wear a little thin. Had the nation’s economy been in better shape and Darling been given more leeway this Budget could have brought hints of the brighter future that has always been promised. Unfortunately this wasn’t the case, in fact with house sales and share prices taking a tumble 2009 could potentially be worse for the economy than 2008 as the expected Stamp Duty changes don’t look likely for some time yet. According to the Halifax, the average stamp duty bill is now £1,751, which is up 82% on 2002. In fact, there was no mention of Stamp Duty thresholds and no new measures introduced. This lack of action is likely to provoke a severe reaction from the property industry.

That said, there are many ways to avoid tax under current legislation, especially Capital Gains Tax. To get the full details I thoroughly recommend Tax Cafe and their book “How to Avoid Paying Capital Gains Tax”, this book and all their other property related tax books are a “must-have” for any serious property investor and I can vouch for this 110% as I have bought and read them all and regularly refer back to them during the course of my daily business.