On the horizon: the Autumn Statement and real estate taxation

The next couple of months should give us a much clearer idea of the likely future direction of law and policy affecting real estate. One undoubted highlight to watch out for is the King’s Speech on 7 November. Much interest will inevitably surround Rishi Sunak’s first (and potentially his only) opportunity to set out his legislative agenda. Further reform to the residential long leasehold system is expected to be announced, but what else? With a general election expected in 2024, the government may need to be modest in its ambitions for what is likely to be the final session of the current parliament. Just over a fortnight later, on 22 November, the Autumn Statement will be delivered to parliament by chancellor Jeremy Hunt. While we might usually expect some sweeteners ahead of an election, the chancellor is managing expectations by playing down the likelihood of tax breaks until inflation has been brought under control. Notwithstanding that, any changes in fiscal policy announced in the Autumn Statement may still impact the real estate sector. For example, government responses are awaited following consultations on various aspects of real estate taxation, including: Stamp duty land tax – changes to the treatment of “mixed property” purchases (ie purchases involving residential and non-residential property) and to multiple dwellings relief; Construction Industry Scheme – several possible reforms, including removing all payments by landlords to tenants from the ambit of the scheme. The Autumn Statement might provide some indication as to the government’s intentions but we will have to see whether the government has the time – and inclination – to progress these matters ahead of the election. By the time the King starts talking on 7 November, we may also have a better idea of what we can expect in the longer term, whoever wins the election. The party conference season is under way and October will see the Conservatives gather in Manchester, shortly before Labour travels to Liverpool. That fortnight will hopefully shed light on some of the likely manifesto promises. As well as perennial issues such as leasehold reform and housing law, we will be looking in particular for clues on energy efficiency policy. The British Property Federation’s recent call for clarity on the minimum energy efficiency standard roadmap for commercial property demonstrates frustrations within the sector and underlines the need for “regulatory certainty”. Recent comments from the prime minister about the need for action on climate change to be “proportionate and pragmatic”, coupled with Michael Gove’s hint that the cranking up of MEES for residential property may be delayed in order to ease the financial pressure on landlords, suggest the government may choose to prioritise the cost-of-living crisis and other economic factors over the climate emergency. Labour has previously pledged to make Britain “a clean energy superpower” and to fund insulation of millions of substandard homes. But will they be prepared to fly a fully committed green flag alongside the traditional red, even if that might require property owners to spend money or replace their treasured gas boilers with heat pumps? Or have they had their fingers burnt by the apparent impact of the ULEZ expansion on the recent Uxbridge by-election? October symphony When the Building Safety Act was passed in April 2022, the intention was for a phased roll-out in England over 18 months.  Therefore, 1 October 2023 is expected to see numerous significant BSA provisions brought into force, including: the Building Safety Regulator (the HSE) will become the building control authority for higher-risk buildings (buildings that are at least seven floors or 18m tall and include at least two residential units); associated changes to the building control regime, including bringing into force the remaining gateways 2 and 3, the “golden thread” of information and the new dutyholder regime; all new higher-risk buildings must obtain a completion certificate and be registered with the BSR before they can be occupied (and all existing higher-risk buildings must have been registered); amendments to the Fire Safety Order. But this will stop short of full implementation, leaving a number of provisions to be commenced later. We will also see the continued implementation of the BSA in Wales. Earth song A reminder that biodiversity net gain (the mandatory planning requirement to ensure that development enhances rather than reduces biodiversity) will apply to new planning applications from November 2023, although at the time of writing we await the necessary regulations to bring the relevant provisions of the Environment Act 2021 into effect and set the actual start date. Small sites (as defined) will be included from April 2024. Beyond the horizon Developments to look out for in the longer term include: Consultations: In addition to the outstanding government responses to the consultations on MEES, SDLT and CIS (see above), don’t forget we also await the Law Commission consultation paper on business tenancies and the Landlord and Tenant Act 1954 by the end of the year. Legislation: Watch out for progress on the passing and implementation of several Bills, including the Renters (Reform) Bill (still awaiting its second reading at the time of writing), the Levelling-up and Regeneration Bill (at report stage in the House of Lords at the time of writing) and the Economic Crime and Corporate Transparency Bill (undergoing “ping pong” at the time of writing, where the House of Commons and House of Lords seek to agree any final amendments). Bill Chandler is a professional support lawyer at Hill Dickinson LLP Image © Pexels/Kellie Churchman