LIVE UPDATE – 2024 Budget For The Property Industry
The Autumn Budget is one of two annual economic updates from the UK government. This year, it was presented by Britain’s first female Chancellor, Rachel Reeves, READ HERE to find out what was announced.
The Autumn Budget is one of two annual economic updates from the UK government. This year, it was presented by Britain’s first female Chancellor, Rachel Reeves, marking a significant moment for Keir Starmer’s Labour government, which came into power on July 17, 2024, ending 14 years of Conservative rule.
In this budget, Reeves outlined plans to counter “short-termism” and committed to raising £40 billion in taxes to support sustained economic growth. Here’s a breakdown of the key points affecting landlords and Homeowners, from changes to Capital Gains Tax (CGT) and Stamp Duty to National Insurance (NI) and Inheritance Tax (IHT).
Landlord and Homeowner Impact
Higher Stamp Duty on Additional Property Purchases
The Stamp Duty Land Tax surcharge on second properties will increase from 3% to 5% tomorrow, significantly raising the cost of purchasing additional properties, whether for personal investment or within a company structure.
New Tax System for Non-Domicile Landlords
The current non-domicile system will be replaced by a New Resident Base Scheme, though the details are still unclear. The change may affect how taxes are deducted on behalf of non-domicile landlords, potentially impacting future tax obligations for these investors.
Inheritance Tax Remains Unchanged
Inheritance Tax will stay frozen until 2030, with a personal allowance of £325,000 and an additional £175,000 available if passing on a residential property to a direct descendant.
No Change in Capital Gains Tax on Residential Property Sales
Capital Gains Tax on residential property sales remains unchanged at 18% for basic-rate taxpayers and 24% for higher-rate taxpayers. This stability means landlords and homeowners won’t face additional tax costs when selling investment properties.
Employers’ National Insurance
Contributions go up from 13.8% to 15%. The threshold at which employers start paying drops from £9,100 to £5,000
Other Noteworthy Announcements
- Fuel Duty and Corporation Tax: Both remain unchanged, providing some stability for landlords with corporate property holdings.
- National Living Wage (NLW): For workers aged 21 and above, the NLW will rise by 6.7% to £12.21 per hour, effective April 2025.
- National Minimum Wage (NMW): For 18-20-year-olds, the NMW will rise to £10 per hour, and apprentices will receive a substantial increase to £7.55 per hour.
If you have any questions on the budget changes please feel free to contact us on 0207 113 1066.
GLP Team.