UK Property Tax Laws and Regulations That Could Change Under New Government

The Labour Party's recent victory in the General Election, with Sir Keir Starmer as the new Prime Minister and Rachel Reeves as the new Chancellor of the Exchequer, marks the beginning of significant shifts in UK property tax laws. In her inaugural address to the Treasury, Reeves outlined key changes that will impact the property market, focusing on SDLT rates, the non-dom regime, and investments in grey belt lands, among other areas.

Key Changes for the UK Property Market

Extra 1% SDLT Rate Increase for Non-Residents

The Labour government plans to increase the Stamp Duty Land Tax (SDLT) surcharge for non-residents from 2% to 3%. This measure aims to tackle the housing affordability crisis and generate additional revenue for public services and housing projects.

Abolish Special Tax Scheme for Non-Dom

The Labour government intends to abolish the for non-domiciled residents, which currently allows them to avoid paying UK taxes on foreign income. Replacing this with a modern scheme for short-term UK residents, the move aims to increase government revenue and ensure wealthy individuals contribute fairly to the UK economy.

Focusing on Grey Belt Land

The government plans to develop grey belt land—areas of green belt land considered less aesthetic or underused. The initiative includes building affordable homes, improving green spaces, and enhancing infrastructure like schools and GP surgeries, balancing the need for housing with environmental preservation.

Removing the Ban on Onshore Wind Farms

The Labour government will lift the ban on onshore wind projects, established by the Conservatives in 2015. This change aims to promote sustainable development, reduce carbon emissions, and stimulate economic growth in rural areas, creating job opportunities and supporting renewable energy goals.

Additional Plans for the Housing Market

• Construction of Stalled Homes: Focus on building 14,000 stalled homes in areas like Liverpool Central Docks and Worcester Parkway.
• National Planning Policy Framework (NPPF): Possible reversal of Conservative policies and establishment of a new NPPF to streamline property and housing market regulations.
• Infrastructure Projects: Prioritising long-delayed infrastructure projects on a national level to ensure timely completion.
• National Wealth Fund: Introduction of a new National Wealth Fund by former Bank of England governor Mark Carney, to be announced soon.

Conclusion

The Labour government's proposed changes to property tax laws and regulations aim to address housing affordability, promote sustainable development, and increase tax revenues. By increasing the SDLT surcharge for non-residents, abolishing the non-dom status and developing grey belt land, and lifting the ban on onshore wind farms, the new administration seeks to create a fairer and more dynamic property market. These changes will significantly impact property investors and the broader housing market in the UK.

For more detailed insights, visit the UK Property Accountants website and explore the in depth article on the UK Property Tax Rules that could change under the New Government.