Emergency Budget - Implications for Property Sector

• Posted by David Jones on 23rd Jun ’10 at 10:51 UTC
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Impact of budget upon property and development

Today saw George Osborne′s first emergency budget.
In the property profession it is necessary for us to consider what impact the various tax and policy changes well have upon the property profession and development as a whole.

There is a clear intention to incentivise local authorities via business rate and council tax incentives which enable local authorities to reinvest the benefits of growth into local communities. The Tory manifesto proposed that local authorities be allowed to retain council tax receipts (for a limited period) The aim being to encourage local authorities to address the housing shortage.

Within the planning profession there remains significant scepticism that council tax receipts in themselves will be sufficient to overcome community opposition to often unpopular housing schemes.

The budget also includes references to Local Development Orders. Such orders would created simplified planning zones within which will allow for a more streamlined procedure where local objections are minimal.

We will in due course review the exact wording to understand how these new procedures will work in practice.

The VAT increase will have an impact in certain sectors. Currently certain charities are unable to reclaim VAT for capital projects. An additional 2.5% hike in the standard rate will undoubtedly have a negative impact on some projects. It is imposable to say whether the tax increase is sufficient to actually prevent projects going ahead.

The VAT increase will impact upon smaller residential extension schemes, the fear is that tax increases in this market tend to fuel the black economy.

For further information about planning and the Budget or would like to raise a question, please contact David e-mail To read more on our planning services, please click on the following link: Evans Jones Planning Division.