The 2012 Budget Meant a Variety of Changes for the Newcastle Property Market
When George Osborne announced the budget earlier this year, the Newcastle property market was hoping for big changes.
The changes that were announced however, did not meet everybody's expectations.
The major points of the 2012 budget from the Newcastle property market perspective included increasing stamp duty land tax on properties over £2 million from 5% to 7% although this will not actually affect a great deal of people.
£150 million has been added to the Get Britain Building fund, an initiative made up of organisations from the construction industry aiming to give it a boost. This makes the total funds available £570 million and should result in an estimated 16,000 new homes.
Get Britain Building is calling for a VAT cut to 5% on home improvements. It reports that from every £1 invested into construction, £2.84 is generated in economic activity and 92p of every £1 spent on construction is retained in the UK. This is through benefits to contractors in the Newcastle property market such as plumbers and electricians, estate agents and other trades people as well as the construction industry.
Another measure in the 2012 Budget was to reduce corporation taxes from 26% to 24% with a proposed target of 22% by April 2014. This however only affects companies with profits over £300,000. Smaller companies are still faced with the unchanged 20% tax rate.
Following the budget, Christine Lagarde who is managing director of the International Monetary Fund (IMF) said that the government need to do more; "Growth is too slow and unemployment, including youth unemployment, is too high. Policies to bolster demand before low growth becomes entrenched are needed".
The IMF also recommended that the economy needs to be stimulated and the government need to come up with a 'Plan B'. It has been suggested that the government should reduce spending on public sector wages and increase spending on infrastructure.
The general reaction to the Chancellor's budget is that no risks have been taken; the budget does not harm the Newcastle property market but it doesn't do enough to really boost it either.