The Budget 2010 was billed as "Securing the Recovery", but is perhaps better branded as a "Budget for First-Time Buyers".

With a general election looming, this was never going to be about repaying the deficit, and there was not much left in the cupboard as a pre-election sweetener. In short, it has been an uneventful Budget.

The announcement of a one-year business rate cut for small businesses provides little comfort for a real estate sector on the verge of rating revaluations. Add in Stamp duty land tax (SDLT) relief for first-time buyers (funded by an increased rate for high-value residential properties), together with the targeting of SDLT partnership schemes, and that about sums it up.

The real estate highlights:

Stamp duty land tax (SDLT)

  • From tomorrow (25 March 2010), and for the next two years, "first-time buyers" (a narrowly-defined term) of residential property paying £250,000 or less will enjoy relief from SDLT.
  • From 6 April 2011, a new 5% rate of SDLT will come into force for acquisitions of residential property for more than £1 million.
  • From today, certain SDLT planning schemes that rely on the SDLT partnership rules will be subject to new anti-avoidance measures.

Capital allowances

  • The annual investment allowance (AIA) will be doubled from £50,000 to £100,000 from April 2010. Businesses of all sizes currently benefit from AIAs on expenditure incurred on qualifying plant and machinery.
  • Biomass-fired warm air heaters and Permanent Magnet Synchronous Motors will be added to the list of energy-saving and water efficient technologies that currently benefit from enhanced capital allowances at 100%.

VAT

  • The existing compulsory VAT registration threshold will be extended from £68,000 to £70,000 with effect from 1 April 2010.
  • Revenue protection measures will be introduced to ensure that VAT recovery in respect of certain property (including land) is restricted only to the business use of the asset. Under existing arrangements ("Lennartz" accounting) VAT on certain property (including land) is recoverable upfront in full on both the business and private use of the asset (subject to any partial exemption restriction). VAT is then repayable to HM Revenue & Customs over subsequent years in respect of private use.

Real estate investment trusts (REITs)

  • REITs will be allowed to issue stock dividends in lieu of cash dividends in meeting the distribution requirement (90% of property rental business profits).

Capital gains tax

  • For disposals on or after 6 April 2010, the lifetime limit on gains qualifying for entrepreneurs' relief (which gives an effective 10% rate rather than the full rate of 18%) will double from £1 million to £2 million.

Business rates

  • Business rates will be cut for small businesses for one year from October 2010.

Eco taxes

  • From 1 April 2011, the standard rate of landfill tax will increase to £56 per tonne of waste. The rate currently stands at £40 per tonne, and will increase to £48 per tonne on 1 April 2010.
  • The ability to mitigate a landfill tax liability by donating to qualifying environmental initiatives will be curtailed: from 1 April 2010, only 5.5% of such spending can be set against a landfill tax liability (as opposed to the current 6%).
  • Further in the future, changes are afoot to reduce the number of types of landfill that qualify for the reduced rate of landfill tax: the current "active/inert" criteria are to be replaced by a new set of (to be confirmed) criteria.
  • The rate of aggregates levy will increase on 1 April 2010 from £2 per tonne to £2.10 per tonne.