GIVE US SOME CLARITY, PLEASE, MRS REEVES

With the announcement this week that the Budget won’t take place until 26^th November, there is plenty of opportunity for the waves of speculation about Mrs Reeves’ plans when it comes to property taxation to continue for weeks to come.

Unlike many other forms of wealth, it’s difficult to hide property, or take it abroad, and so it can be a tempting target for Chancellors who are looking to increase the tax take.

Now everyone will have their own opinions on the rights and wrongs of this, and I am certainly not about to get political – but whatever your allegiance, we can all agree that two months of uncertainty and speculation is hardly helpful for those who are looking to buy or sell a home.

No doubt some of the more outlandish ideas being batted about have been put out there so that whatever actually transpires seems moderate by comparison (a common trick used by politicians of ever colour).  But if in doing so they damage confidence, that hardly helps.

For example, suggesting that the capital gains tax exemption for primary residences might be removed for properties above a certain price is simply going to result in those who might have been thinking of moving to stay put, especially older people who might be thinking about downsizing, but who will stay put if moving means incurring a big tax bill.

These are just the kind of family-sized properties which are needed in the market right now, and if supply if restricted, the inevitable consequence will be rising prices.

Similarly, the idea of a ‘national property tax’ levied on homes costing more than £500,000 when they are bought – with a higher rate for those costing over £1 million – is hardly designed to encourage those who bought at levels below that some years ago to move.

Property taxes are sometimes regarded by Chancellors as an easy way to raise revenue, but if they are not thought-through, there can often be unintended consequences, both for those looking to move home, and the Treasury itself. 

For that reason, I suspect that in the end, for most people, the budget will make little difference to the process of buying and selling a home.  There is no reason to sit on your hands and wait to see what happens.

What we need above all right now is clarity and certainty.  Ten more weeks of speculation will help no-one – including the wider economy.