Last week's "summer" Budget, the first by a (solely) Conservative government for nearly two decades, was full of surprises but contained relatively few specific property tax measures.
Much like the rest of the measures announced, those related to property give with one hand and take away with the other…

1. Residential landlords – reliefs restricted

Finance costs

From April 2017, individual landlords of residential property will lose some of their current tax relief on finance costs.

Currently, such landlords can deduct finance costs (notably mortgage interest) when calculating their tax on rental income. This gives rise to tax relief at 40% or 45%, for wealthier landlords.

Such landlords' relief will be restricted to the basic rate of income tax (20%). The restriction will be phased in over four years from April 2017.

The change is designed to address the current preferential treatment for landlords, as opposed to homeowners, and also stem the rapid growth of buy-to-let mortgages.

Wear and tear

From April 2016, residential landlords of furnished properties will only be able to deduct from their taxable income the actual costs of replacing furnishings. Currently there is a 10% annual "wear and tear allowance", irrespective of actual expenditure.

2. Inheritance tax changes

New "main residence" allowance

From April 2017 a transferable "main residence" allowance will be introduced. This move was set out in the Conservative Party's 2015 manifesto.

When a person's main residence is, on death, passed to direct descendants (children or grandchildren) a transferable allowance (effectively a new nil-rate band) will be available. Initially the amount of the allowance will be £100,000 (in 2017/18) but it will gradually increase to £175,000 (by 2020/21).

The current nil-rate band (of £325,000) will continue to be available. From 2020/21 there will therefore be an effective £500,000 inheritance tax threshold. The new main residence allowance, like the current nil-rate band, will be transferred to a surviving spouse or civil partner, if unused.

Non-doms

Along with other proposed changes to the UK's controversial and, in the run-up to the election, much debated, "non-domicile" tax regime, the Chancellor also announced a change to the interaction between the inheritance tax and non-dom rules.

From April 2017, inheritance tax will be payable on all UK residential property owned by non-doms, regardless of their UK residence status. A consultation on this change will take place later this year.