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Reports in Respect of 2006 Budget and its Impact upon the Housing Market
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TREASURY Minister Allan Bell today delivered his fifth and final budget of the current government - and described it as a 'springboard to the future'.
Key features include the introduction of zero rate corporate tax and a £100,000 per year tax cap for the super rich.
But Mr Bell also announced measures to help those on low incomes with a £2.5 million package of additional support, including a 40 per cent increase in personal allowance credit.
In addition, the cash-strapped DHSS is to receive an extra £16.9 million to protect front-line services while the Department of Education is get an additional £4.6 million.
Personal allowances will increase by two per cent to £8,670 for a single person and £17,340 for married couples while the threshold at which the higher tax rate becomes payable also rises by two per cent.
Standard income tax rate stays at 10 per cent and the higher rate remaining at 18 per cent.
Mortgage tax relief will also be retained but scrapped for second or multiple homes.
Mr Bell told Tynwald: 'What I believe we are doing today is putting in place future measures that will create new opportunities in our neverending quest for economic progress and will provide a springboard to the future - a future in which all our citizens will benefit.'
21 February 2006
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21/09/2006
Thu September 21 2006
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THE £100,000 personal income tax cap introduced in February's budget is set to put massive strain on the Island's executive housing market according to estate agents.
Interest in houses worth £1m or more has rocketed, as wealthy individuals look for a Manx relocation following the introduction of the generous new tax laws.
The interest should be good for the economy, but estate agents are warning that the short supply of top end properties for sale in the Island will push prices sky high as people queue up to buy. If big earners can't find somewhere to live the effectiveness of the new tax strategies could be negated.
David Creane, chairman of Cowley Groves, said that he is receiving two requests a day to view properties in the £1m plus bracket.
He said he negotiated sales on two properties between £1.5m and £2m in March and one in excess of £2m. Before the tax changes the average was around three viewings per quarter.
He said: "Eventually there will be very little property on the market in that price range. It's an ideal opportunity for somebody who is getting too old for their property, to downsize."
He added that many people will be forced to settle for a compromise property in the £500,000 to £1m bracket, thus putting pressure on prices in the rest of the market.
Graham Ferguson Lacey, chairman of Sefton Hotels, warned that planners and developers needed to pay more attention to this end of the market, if the Island is to benefit.
He said: "Speaking to every agent on the Island recently, there were 17 houses on the Island available for sale for more than £1m. The most expensive was £3.25m. If you analysed those houses, it was quite interesting, there were only four houses with the right sort of potential for that type of individual.
"That is going to be one of the biggest limitations of attracting high net worth individuals and making that tax strategy effective. They will not come here unless they can acquire the right property of the right size. It will have consequences from a land use and planning point of view."
He added: "You cannot tell someone who has worked hard and has the money that if you want to come to the Island, you are going to have downsize significantly. Jersey and Guernsey have those types of properties in abundance. If they don't, other locations like Monte Carlo et al have."
Nick Cooper, residential director at Black Grace Cowley, said price inflation in the upper ends of the market is a certainty.
He said: "We will have a queue of people waiting for a decent house to come onto the market and an almighty scrap to buy it. There are hundreds of very desirable properties tucked away on the Island, but they don't come to the market that often. There is a shortage of new exclusive properties, but that's a planning question, which we can't answer."
Mr Creane said that there would be room in the near future for an exclusive development of £1m plus homes situated in a secluded location, possibly around a golf course.
The consensus among the construction and property industry is that the planning system needs to change in order to capitalise on these developments.
Joe McLoughlin, director of planning at Heritage Homes, said the initiative to attract 'super rich residents' to the Island will be hampered by the shortage of accommodation. He said the planning system hasn't acknowledged the problem.
Advertisements SHORTAGE: Croggs on the Old Castletown Road sold for £2m last summer. There is a big shortage of more like this.
"You cannot tell someone who has worked hard and has the money that if you want to come to the Island, you are going to have downsize significantly."
Quote By: Graham Ferguson Lacey
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'The designation of land for low density housing in parkland, which provides for the provision of one substantial dwelling in a parkland setting of one acre minimum, is as close as the planning system comes to acknowledging the need for more expensive properties on the Isle of Man.
'The availability of such land is limited. There has not been any new land zoned for residential use of any kind for over six years and there are currently no indications that this is about to change,' he said.
20 April 2006
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