CBRE responds to Labour's first Budget in 14 years

The Chancellor, Rachel Reeves, has delivered Labour's first Budget in 14 years. Global real estate advisor, CBRE, shares its initial reaction below.

Jennet Siebrits, Head of UK Research at CBRE said: “Today’s Budget marks the largest tax increase since 1993, with the biggest impacts affecting businesses as opposed to individuals. The reduction in the National Insurance employer threshold alone will cost businesses circa £750 more per employee, per annum. However, more positively we are seeing a solid narrative from the Government. The increased taxes will provide much-needed funds to support growth, with a focus on industries of the future, new housing stock and retrofitting key sites across the country.”

She added: “Despite the retained Capital Gains Tax of 24% on residential properties, the increases to Stamp Duty Land Tax on second homes is material, with a further £6,000 payable on a £300,000 second property immediately. The majority of second homes are owned by private landlords and occupied by private renters. This additional charge will act as a disincentive for would-be landlords to enter the market, which could feed through to the supply of new homes.”

Tim Harding, Head of Occupier Rating at CBRE said: “We are disappointed that the 75% Retail, Hospitality and Leisure relief has reduced to 40%, a change that will affect small retailers who will feel the increase in rates bills due to the removal of 35% of the current rates year relief. Of more importance perhaps is the Transforming business rates discussion paper published alongside the budget, in which the Government set out to achieve a fairer business rates system to protect the High Street. This includes Ratable Value thresholds under £500k being introduced to permanently reduce the burden on Retail, Hospitality and Leisure whilst a higher multiplier applies on Ratable Value above £500k.”