In terms of property, the Summer Budget has dealt with changes to property tax. However, we will have to wait until tomorrow (10th July 2015) to find out what measures will be introduced to support the much needed increase in house building.
What we do know is that mortgage tax relief is to be limited on buy-to-let property. There has also been confirmation that IHT will change so that you can pass up to £1 million onto your children free of IHT and no more IHT on family homes.
Buy-to-let landlords have a huge advantage in the market as they can offset their mortgage interest payments against their income, whereas homebuyers cannot. And the better-off the landlord, the more tax relief they get. For the wealthiest, every pound of mortgage interest costs they incur, they get 45p back from the taxpayer. All this has contributed to the rapid growth in buy-to-let properties, which now account for over 15% of new mortgages, something the Bank of England warned us last week could pose a risk to our financial stability. So we will act – but we will act in a proportionate and gradual way, because I know that many hardworking people who’ve saved and invested in property depend on the rental income they get.