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New Lifetime ISA among Budget announcements

Week in Westminster

Published: 18 March 2016 | Author: Michelle Vosper

In his fourth Budget statement within the space of a year, George Osborne’s ‘rabbit’ was the introduction of a new Lifetime ISA to use to save for retirement or to buy a home. From 6 April 2017, any adult under 40 will be able to open this new ISA and save up to £40,000 each year, receiving a 25% bonus from government on the money saved. The limit for property purchased using Lifetime ISA funds will be £450,000. Consumers will be able to continue to open a Help to Buy: ISA until November 2016 as planned. They can also choose to open a Lifetime ISA but will only be able to use the government bonus from one of their accounts to buy their first home.

Other Budget announcements include:

  • Confirmation of the outcome of the government’s consultation on the introduction of a 3% stamp duty surcharge on additional residential properties from 1 April 2016. In the event that there is a period of overlap between the sale of one property and the purchase of another, buyers will have 36 months (rather than the originally proposed 18 months) to either claim a refund from the higher rates or before the higher rates will apply. The higher rates will apply equally to purchases by individuals and corporate investors.
  • The government is consulting on the delivery of public financial guidance to make it more effective. It proposes replacing the Money Advice Service, Pension Wise, and the Pension Advisory Service, with a slimmed down money guidance body.
  • There will shortly be a call for evidence on how to make the house purchase process better value for money and more consumer-friendly.
  • From April 2017 people with property income below £1,000 will no longer need to declare or pay tax on that income.

More information on all of the relevant Budget announcements is available for our members on our website.

This week’s Lords committee stages of the Housing Bill covered debate around the clauses in respect of high income social tenants and secure tenancies; housing, estate agents and rent charges; and neighbourhood and local planning. At the start of deliberations this week, the minister Baroness Williams agreed to a suggestion by Baroness Hollis, to set up a working group with the Local Government Association, housing practitioners and others, to ensure that any fraud experienced through Right to Buy in the local authority sector is not repeated when it extends to housing association tenants.

Following approval in both Houses, the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016 has been published.

The Scottish Parliament has debated and passed two key pieces of legislation this week. The Private Housing (Tenancies) (Scotland) Bill will create a new tenancy regime for the private rented sector. While the Land Reform (Scotland) Bill includes provisions to increase the transparency of land ownership.

And finally, the prime minister announced that Tom Scholar will take over from Sir Nicholas Macpherson as permanent secretary to the Treasury on 31 March. Mr Scholar is currently the PM’s adviser on European and global issues and head of the secretariat on these subjects within the Cabinet Office. He has a background with the Treasury, the IMF and the World Bank.