Property buyers and sellers in Bow will benefit from the government’s decision to put the privatisation of the Land Registry on hold.
The Land Registry, which has recorded the ownership of property since 1862, was due to be sold off as part of a strategy drawn up by former Chancellor George Osborne to raise £5bn by 2020.
Details of the sale were expected to be included in the Neighbourhood Planning and Infrastructure Bill, which was launched in Parliament earlier this month.
Although the Bill contains details of how the government proposes to support more housebuilding, increase the amount of local say over the development of land and speed up the compulsory purchase order system, there is no mention of the Land Registry’s future ownership.
A government source explains: “No decision has been taken on the future of the Land Registry. A consultation on the Land Registry’s future closed in May and we are carefully considering our response. It is only right that new ministers take time to look at all their options before making a decision.”
The consultation document set out several models for the new agency, with its preferred option being privatisation with a contract to the government. Other options included a mutual joint venture between government and a private firm and privatisation with a new regulator in place.
Opponents of the Land Registry’s sale point out that none of the options on the table set out a framework for customer complaints or how any new owner would be held accountable for errors because creation of an ombudsman was ruled out.
What does the Land Registry do?
Although the registry is part of the Department for Business, Energy and Industrial Strategy, it operates as an executive agency and a trading fund. This means it is self-financing because its running costs are covered by the fees paid by users.
In 2014/15 alone, the Land Registry cost almost £261m to run, but it generated £297m of revenue.
How? The Land Registry keeps the official record of commercial and residential land ownership in England and Wales, holding 24 million titles for properties. Data is available to the public via searches at £3 each, and used by other organisations to provide a range of services including the UK House Price Index.
Tax trap for landlords
A second piece of legislation making its way through parliament, however, could mean landlords in Bow will fall into an income tax trap when selling a rental property.
The government has inserted amendments into the Finance Bill, which is due to go before the House of Lords before the end of the year, that mean profits from the sale of second homes will become liable for income tax rather than capital gains tax as at present.
When it comes to investment property sales, CGT is charged at 18% for basic rate taxpayers and 28% for higher rate taxpayers. Income tax rates, on the other hand, are currently 40% for anyone earning more than £43,000 a year and 45% for the highest earners.
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