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What Effect Will the New Coalition Government have on the Property Market?

In a week when history was made with the Conservatives and the Liberal Democrats forming the UK’s first coalition government since the War, we look at what effect this will have on the property market.

The first change regarding the property market is that Home Information Packs (HIPs) will be scrapped. The HIP was a set of compulsory documents that had to be provided by the seller or the seller’s agent when selling a house. The main advantage of HIPs was that there was less chance of buyers becoming aware of surprises at the end of the process. However, despite it being scrapped the government have confirmed that energy certificates that formed part of HIPs will still be a compulsory requirement.

A concession made by the Conservatives was with regards to Inheritance tax (IHT). The Conservatives were planning to increase the threshold at which you had to pay inheritance tax from estates worth £325,000 to estates worth £1 million. Due to the coalitions commitment to a fixed term in office it is likely that this threshold will remain unchanged until 2015.

Other significant changes relevant to the property market includes the concession made by the Liberal Democrats over their proposed mansion tax of 1% on properties valued over £2 million to allow the tax free earning threshold to rise to £10,000.

Overall, there is still an element of uncertainty about the long-term impact of the new government on the property market. Some for example see the plans to increase capital gains tax on non-business gains from 18% to 50% which they fear would weaken demand for property by second home buyers and buy-to-let investors.

We will be closely following any changes made by the new government and its impact on the property market. Sign up to our RSS Feed to stay informed on any progressions made.

If you are looking to sell your property quickly, then contact The London Property Buyers NOW on: 0800 879 9889

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