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Help to Buy boost for smaller developers in Scotland
A £30 million scheme to open doors for people to buy new homes in Scotland from small and medium sized house builders has been launched. The Scottish Government said that it’s Help to Buy (Scotland) Small Developers scheme will spread support more widely across the house building industry by helping buyers who want a new property built by one of around 170 smaller developers. The new funding will be available for purchases up to £250,000 between 01 April 2015 to 31 March 2016 but applicants can apply up to nine months in advance of the anticipated completion date. The purchaser can buy back the equity at any time, usually at point of sale, based on the value of the property at that time. Unlike in England, there is no interest charged on the equity whereas interest is charged in England and Wales annually from year six onwards. Under Help to Buy (Scotland), the Scottish Government takes an equity stake of between 10% and 20% of the value of the property which can be repaid at any time. House builders have to register with the scheme and currently around 170 are classed as small builders and 20 are defined as large builders. ‘The Scottish Government is supporting the housebuilding industry and Help to Buy (Scotland) is one of the creative ways we are stimulating new development, opening up the market to thousands of house buyers,’ said First Minister Nicola Sturgeon. She pointed out that over 4,100 homes have been bought in the last 15 months, many from larger builders, with smaller and medium sized developers seeing a smaller share of sales. ‘So this new support of £30 million will be ring fenced to support purchases from 170 smaller building companies that develop thousands of quality homes across the country. These are often in remote locations and keep much needed jobs and skills in rural areas, while having a positive knock on impact on the wider economy,’ she added. Pete Bell, chairman and managing director of Campion Homes, said it is a welcome recognition of the important role that smaller firms play in the continuing growth of Scotland’s house building industry. The ring fencing of the funds gives small and medium sized developers the confidence to progress developments which will be available for buyers taking up the Help to Buy (Scotland) Small Developers scheme,’ he explained. According to Philip Hogg, chief executive of industry body Homes for Scotland which helped shape the new scheme in order to deliver maximum impact and benefit, the additional funding is warmly welcomed. ‘We continue to work closely with the Scottish Government to help address the challenges associated with planning and accessing development finance which also particularly impact smaller builders,’ he added. Continue reading
Singapore and Hong Kong are most expensive for foreign property investors
Singapore and Hong Kong are the most costly places for a foreigner to invest in real estate as they are subject to more property taxes, new research has found. They are more expensive as they are locations where the disparity between the tax burden on foreign and local investors reflects a ‘foreigner premium’, according to an analysis from international real estate firm Knight Frank. Cooling measures in Hong Kong amount to a 15% Buyer’s Stamp Duty and in Singapore there is also a 15% Additional Buyer’s Stamp Duty and a higher tax for foreign investors. Australia, Malaysia and Thailand also work out more expensive due to taxes which effectively amount to higher real estate tax levels for foreign buyers. In Australia, Thailand and Singapore foreign buyers acquiring a property for investment are subject to more taxes than if they were buying for their own use. On the other hand, Cambodia, Japan, Malaysia and South Korea do not impose such premium on both foreign and local investors. In the analysis, the Special Stamp Duty and Seller’s Stamp Duty in Hong Kong and Singapore respectively are found to be the most potent policies to deter property flipping. The report explains that following the global financial crisis and its significant impact on fiscal revenues for countries around the world, the global tax landscape has been rapidly changing. ‘Not only has there been more aggressive clamping down on loopholes and a pressure to improve tax governance, we are seeing more cooperation between countries on an international scale,’ it explains. The tax burden ranges between 12.6% and 15.5% in Australia mainly because stamp duty varies among states. In Cambodia, if the investor opts for a ‘hard title’ registered with the national Land Office, as opposed to a ‘soft title’ issued by local authority, he will incur the 4% transfer tax which accounts for the huge cost difference. Some markets effectively charge an investment premium, according to the report. For example, a foreigner buying a property in Australia for investment is subject to 7.4% more taxes than if he purchases it for self use, excluding income tax on rents which is not applicable to an owner occupier. For a local buying a second property for investment purposes, the premium varies considerably depending on the reference point. If the second home is for self use instead, he pays only slightly less in tax. The huge difference in premium implies that Australia taxes more on the purchase of a second property per se than on the purpose of the purchase. Similarly, the cooling measures in Hong Kong and Singapore target the number of properties owned but do not distinguish between investment and self use homes. In contrast, Thailand taxes on investment properties, regardless of the number of houses possessed. Even though Australia and Cambodia do not tax according to holding period, average annual tax burden is lower for long term ownership mainly because one off costs, namely stamp duty and… Continue reading
UK home owners would rather improve than move, new research suggests
Most home owners in the UK would rather spend money improving their current property than moving, new research suggests. An overwhelming majority (94%) of UK homeowners would rather spend money improving their current home than sell up and move on, research reveals today. Despite the recent reduction in stamp duty and 0.7% rise in house prices, 49% of the nation’s respondents plan to stay put and renovate in 2015, and are happy to spend over £5,500 doing so. Indeed 94% would rather spend money and 43% say one of their main reasons for renovation is to make their home look nicer, whereas only 6% cite it for the purpose of selling in 2015. The survey, commissioned by Wooden Blinds Direct, questioned home owners from across the UK on their home improvement spending in 2014 and projected spend in 2015. Regionally there were differences. Just 35% of Scottish home owners are planning a renovation in 2015, with an average £4,576.21 spend. In contrast, South West home owners plan to spend over double this, forking out an average £10,430 for their extensions, decorating and other renovations. The home improvement survey also found that men plan to spend on average £1320.78 more than women on home renovations in 2015 who would spend on average, £6216.52. Northern Ireland is set to have the biggest increase in home renovation during 2015, rising 173.5% while Wales the biggest drop in home renovation, falling 51.18%. Some 43% of North East home owners would like to invest in their homes to reduce energy bills, compared to only 17% of Scottish households. ‘The housing market is still volatile and that’s reflected in the results of our survey. People are more concerned with making the house they’re in more comfortable than moving out. Whether that’s by extending and building or even by simply redecorating rooms it’s obviously a much cheaper alternative,’ said Lee Fisher, marketing manager at Wooden Blinds Direct. Most home owners in the UK would rather spend money improving their current property than moving, new research suggests. An overwhelming majority (94%) of UK homeowners would rather spend money improving their current home than sell up and move on, research reveals today. Despite the recent reduction in stamp duty and 0.7% rise in house prices, 49% of the nation’s respondents plan to stay put and renovate in 2015, and are happy to spend over £5,500 doing so. Indeed 94% would rather spend money and 43% say one of their main reasons for renovation is to make their home look nicer, whereas only 6% cite it for the purpose of selling in 2015. The survey, commissioned by Wooden Blinds Direct, questioned home owners from across the UK on their home improvement spending in 2014 and projected spend in 2015. Regionally there were differences. Just 35% of Scottish… Continue reading
