Tomorrow marks the first Budget since the Conservative’s election victory in May. Amongst the proposed changes are alterations to the inheritance tax, which could lead to a number of families looking to get their homes re-valued.
The mooted changes would see inheritance tax linked directly to the value of a home for the first time. Chancellor Osborne is expected to confirm the move which would see the effective inheritance tax threshold for married and civil partners to £1m. According to analysis of Land Registry data by NFU Mutual, a number of areas have been identified where the value of homes exceeds the suggested £1m price cap.
Research from NFU Mutual indicates that families in Gloucestershire, Dorset and Cheshire might be extremely interested in having their property re-valued, should the proposals come into force.
‘If you don’t know how much your home is worth, then there’s real danger that you and your family could lose out,’ commented Nicki Whittaker, high-value home specialist at NFU Mutual. ‘Around three in every ten homes are undervalued by their owners, leaving families at risk of underinsurance and an unexpected tax bill, she added.’
Approximately, 80% of million pound properties sold in England and Wales over the last 15 years are in London and the South East. However, there are pockets of high-value homes in the rest of the country, including regions of the South West.
Tax changes could lead to homes being re-valued
Whittaker continued by saying that she expects there to be a, ‘rush to re-value these properties as parents and grandparents look to hand down as much as they can to their families. But many of these bespoke and listed properties need more thorough assessment to establish their true worth.’ She added that, ‘figures from our valuation partners show many expensive country homes are dramatically undervalued because owners are often unaware that the cost of rebuilding listed and unique properties is so much greater.’
‘It’s clear from these results that thousands more people need to take action if they want to make sure their biggest financial asset remains in the family. A valuation and some simple tax planning would help to make sure people are fully protecting what is rightfully theirs,’ Whittaker concluded.