Summer Statement 2020 - Property Measures

There were a range of measures affecting property announced in the Chancellor’s Summer Statement. We will need to see the documents setting out precisely how these measures will work, but the most eye catching is the temporary increase to the stamp duty land tax (SDLT) nil rate threshold to £500,000 for transactions between 8 July 2020 and 31 March 2021. There are also a number of other measures scheduled to start over the next few months which will impact the way business activity is done in the property sector.

A big part of the announcement was the measures designed to protect employment and jobs, and you can find further coverage of these measures here.  Below is a summary of a selection of the property specific measures mentioned above.

For a further discussion of any of these points, please get in touch with a member of the Mazars real estate team.

SDLT reduced to zero for residential purchases to £500,000

The Chancellor today announced that with effect for purchases on or after 8 July 2020 and up to 31 March 2021, there will be no SDLT on consideration up to £500,000.  This will act purely as a temporary increase to the nil rate threshold, without further restrictions, this means that for residential buyers in England and Northern Ireland:

  • Fist time buyers will pay no SDLT at all on purchases up to £500,000 (they could previously have had an SDLT liability of up to £10,000).
  • Other individual buyers of residential property without another residential property will also pay no SDLT (they previously had an SDLT liability of up to £15,000).
  • These savings remain for purchases above this level, so for example an individual purchaser of a £1m property (without another property) will save £15,000 (their liability will be £28,750 instead of £43,750).

This should help free up transactions in residential properties market for the period to 31 March 2021.  Whether the buyer or the seller gets the benefit of the rate cut will perhaps depend on how strong the demand is in this sector.  Lessees of residential property will also benefit from the temporary increase in nil rate threshold.

The nil rate threshold will revert back to the pre 8 July 2020 level on 1 April 2021.

Subsequent to the announcement for SDLT, the Scottish Government has announced a temporary increase in the residential property nil rate band for land and buildings transaction tax (LBTT) from £145,000 to £250,000 for the period 15 July 2020 to 31 March 2021.  The Welsh Government has also announced a temporary increase in the residential property nil rate band for land transaction tax (LTT) from £180,000 to £250,000, for the period 27 July 2020 to 31 March 2021.  The increased Welsh nil rate band will not apply for the higher rates applicable to additional dwellings.

Green deal measures

A green homes grant was announced that will offer at least £2 for every £1 homeowners spend to make their homes more energy efficient.  The amount available per household will be at least £5,000 (requiring a £2,500 spend by the property owner) for a total spend of £7,500.  The policy document comments that for those on the lowest incomes, the amount available will be up to £10,000 for energy efficiency measures.  In addition, a new Social Housing Decarbonisation Fund will help social landlords improve the least energy-efficient social rented homes, starting with a £50m demonstrator project in 2020-21 to decarbonise social housing.

There will also be funding to improve energy efficiency in the public sector estate, with £1bn to be made available to public sector bodies including schools and hospitals for grants to fund both energy efficiency and low carbon heat upgrades.

These measures should increase activity for businesses supplying energy efficient goods and services, though the impact will depend on how easy it will be to access the Government finance.


A number of measures in the announcement should increase activity in the construction sector in the short term.   Some of these are noted below:

The Chancellor’s policy document commits to new legislation in summer 2020 to make it easier to build homes by making it easier to convert buildings for different uses, including housing, without the need for planning permission.  In July 2020 there will be a policy paper setting out the Government’s plan for comprehensive reforms of England’s planning system to support the economy and release more land for housing in areas of need.

There will be £450m additional funding for SME housebuilders that are unable to access private finance, for the purpose of assisting the finance of housing development.  A proportion of this fund will be reserved for firms using innovative approaches to housebuilding such as ‘Modern Methods of Construction’.

A £400m Brownfield Housing Fund will be allocated to seven Mayoral Combined Authorities to bring forward land for housing development in England. To allow authorities to begin delivering projects quickly, 90% of the fund will be allocated immediately on a per capita basis, with 10% to be allocated through a competitive process.

Additional funding of £560m will be made available for schools in England to improve the condition of their buildings and estates in 2020-21.  In addition to £1.5bn funding for roads maintenance already announced, a further £100m will be made available to deliver 29 local road maintenance upgrades across England in 2020-21, including eight bridge and viaduct repairs and improving local roads.  There will also be £10m to develop plans for improving the reliability and capacity of the Manchester rail network, and £300m to boost equipment and infrastructure across universities and institutes across the UK in 2020/21. 

Whether there is sufficient time for the measures allocated to 2020/21 to be fully effective remains to be seen.

Tax measures already announced that will shortly impact the construction sector

In addition to the above announcements, there are a number of previously announced tax measures that will impact the construction sector including:

  • The introduction from 1 March 2021 of the domestic reverse charge in the construction sector, which will remove the requirement to account for VAT on intermediary supplies in the construction sector.  A recent development to this initiative is that in order for VAT to be charged, the end user must notify the fact that they are an end user to the supplier, effectively making it optional for the end user to give this notification.  Affected businesses should be examining the impact this will have on their cashflows and should be reviewing any existing contracts that are likely to continue past the commencement date.
  • The introduction from 6 April 2021 of off-payroll working rules to the private sector, requiring engagers to determine whether they should account for PAYE/NIC on payments to contractors they use.  AS the responsibility for accounting for PAYE/NIC moves from the contractor to the engager, this could result in a more cautious approach with increased level of deductions from payments for contractors. 

There will be complex interactions between the above two measures and the existing obligations for withholding under the construction industry scheme (CIS).