It has been a busy Budget for the real estate sector today, particularly for the residential sector.  The big announcement was the proposal to abolish SDLT’s multiple dwellings relief (“MDR”).  This came as a surprise and for those seeking to rely on the relief for a completion on or after 1 June 2024, they may have been racing to exchange today to lock in MDR on the acquisition.  However, there was some good news for those trying to access the housing market.  The government is proposing to withdraw the furnished holiday letting regime and reduce the higher rate of CGT for those who pay CGT on selling residential properties as these are intended to improve access to housing. But elsewhere reform for SDLT was relatively light.  The government did not respond to lobbying in a few targeted areas. A downsizer’s relief and keeping the current lower thresholds beyond March 2025 were not mentioned.  In further good news the government gave the green light to a new non-authorised fund vehicle, to be called the reserved investor fund or “RIF”.

The Government has announced a further series of proposed changes to the UK REIT rules as part of the wider review of the UK funds regime and published draft legislation. This third set of changes are earmarked for Finance Act 2024 and keep to the program of reform to modernise the REIT regime and generally to make it more accessible.

Underneath the headline points, the Budget contained a number of measures designed to fulfil the Chancellor’s objective of encouraging growth and investment.  There was broadly good news for those investing in UK real estate.  We look at some of the key announcements relevant to real estate below.

International law firm BCLP is advising long-standing client, Secure Income REIT PLC (SIR), on its recommended merger with LXi REIT PLC (LXi). The transaction is structured as an all share offer with a partial cash alternative. Depending on the take-up of the partial share alternative, SIR shareholders will own around 47% of the combined company, which will remain listed in London.

The Government has confirmed it will introduce a series of changes to reform the REIT rules to remove barriers to entry to the regime and to make operation of the regime easier.  The first set of changes will be implemented from 1 April 2022.  A further set of changes, which are being considered as part of a wider reform of the UK’s funds rules, will be introduced at a later stage.