Update for rural estates on policy developments
Like all businesses, rural estates and property owners are suffering from the coronavirus-induced economic slowdown. They should, therefore, continue to make the most of the economic support available from the government. We have written about relevant measures introduced by the government in the past few months, including the furlough scheme, and set out the details here of further schemes announced in the government’s summer economic statement:
- Under the £2 billion Green Homes Grant homeowners and landlords will be able to apply for vouchers to make their homes more energy efficient. Households will be able to claim back 2/3 of the cost up to £5,000 per household of improvements like insulation and double glazing. Landowners should make the most of this and encourage their tenants to do the same. They should also consider obtaining accreditation for estate builders to allow them to do this work and claim the money from the government.
- The furlough scheme comes to an end in October and winds down between now and then. To incentivise employers to keep employees once furlough ends, it will pay employers £1,000 per employee brought back and continuously employed from November until January 2021. Rural estates who have put employees on furlough take this into account when deciding whether to bring back furloughed staff.
- The government announced a VAT cut from 20% to 5% for tourism and hospitality, which will benefit for landowners with interests in these sectors. It is designed to boost pubs, restaurants historic houses and holiday lettings – types of attractions hurt by the lockdown and struggling with social distancing. According to the CLA, this should increase demand for staycations. “Until now VAT on tourism businesses has been much higher than in other comparable countries putting domestic tourism businesses at a competitive disadvantage to holiday providers overseas,” said CLA president Mark Bridgeman. “This welcome change from Government means more people will be able to afford to enjoy a holiday in the Great British countryside whilst also helping to revive rural economies across the country”.
- The government also cut SDLT (Stamp Duty Land Tax on home purchases) for all home purchases up to £500,000 until 31 March 2021. Now is, therefore, a good time for property owners looking to sell properties and take advantage of increased demand and affordability arising from this tax cut. It will principally influence sales of lower value homes.
Other recent developments outside the summer economic statement:
- The Agriculture Bill, setting out how farmers will be supported after EU subsidies cease, continues through Parliament. Members of the House of Lords are currently questioning the legislation. Amendments are likely in the Autumn, at which point the bill will return to the House of Commons and likely pass into law before Christmas.
- Last week the government announced a £40 million Green Jobs Challenge Fund. It said: “it is envisaged that the fund will create a broad range of short and long term jobs such as ecologists, surveyors, nature reserve staff and education workers in environment organisations; and support their suppliers in areas such as agricultural engineering, horticulture, and equipment and seed supply.” Details are unclear, but it is likely that rural landowners and their employees will be able to benefit from this money. It is also likely that it will feed into the government’s wider commitment to redirecting farming policy towards environmental sustainability, as set out in the Agriculture Bill currently going through Parliament.
- The consultation on the England Tree Strategy opened on 19 June and will close on 11 September. Anyone with woodland or land that could be turned into woodland should pay close attention and respond to the consultation, which will inform government forestry policy and might shape how landowners might be incentivised to grow more trees.
- Prime Minister Boris Johnson set out what he described as “the most radical reforms to our planning system since the Second World War, making it easier to build better homes where people want to live.” Details of the scheme are yet to emerge and it seems principally directed at urban rather than rural areas. But it may indicate a direction of travel and trickle down to loosen constraints on planning in rural areas too.
Henry Cecil is a Partner, and Henry Vane, an Associate, in the Private Client team.
The current global crisis is evolving rapidly, and the rules and guidance for individuals, companies and other entities to manage its implications are similarly fast moving. Notes such as this may be out of date almost as soon as they are published. If you have any questions prompted by this article or on any other matter relevant to you, please get in touch with your usual contact at Forsters.