Spring Budget: Stamp duty and holiday let tax breaks abolished
The Spring Budget 2024 policy paper starts off by saying the last few years have been tough for the UK economy, which has faced unprecedented shocks from the legacy of the COVID-19 pandemic, an energy price spike driven by Putin’s illegal invasion of Ukraine, and globally high inflation.
During Chancellor Jeremy Hunt’s budget speech, he included workers' National Insurance cuts of another 2p in the Budget, meaning it falls from 10% to 8%. New official forecasts on the BBC say the government will collect 37.1p of every pound generated in the economy in 2028/29—the highest level in 80 years.
He increased the child benefit threshold from £50,000 to £60,000 and also announced a six-month extension to the Household Support Fund and a freeze on alcohol and fuel duty.
Mortgage Solutions magazine highlights: "Not announced in the speech but published in the Spring Budget report were stamp duty changes for registered landlords, public bodies and nominee purchasers. From 6 May, nominee purchasers will be eligible for first-time buyers’ stamp duty relief when buying a leasehold property through a nominee or bare trustee in England and Northern Ireland."
Mr Hunt increased the VAT threshold for small businesses to £90,000, and announced new taxes on vapes and higher taxes for business class flights. Mr Hunt also announced he is "abolishing" the "non-dom" tax system, but new arrivals to the UK will still not pay taxes on foreign income for four years.
Labour leader Sir Keir Starmer said rents were up 10 per cent and mortgage repayments up an extra £240 a month for a typical family remortgaging this year. He added the Conservative party is unable to generate the growth people need, and “people are being asked to pay more for less and less.”
Pledge to build more homes
The Intermediary magazine reports that Chancellor Jeremy Hunt has remained firm on the Conservative Government’s pledge to deliver over one million homes during the current Parliament.
Vowing to level up opportunities across the generations, Hunt said that the current Government was committed to “building houses for more young people.”
According to Mr Hunt, last week the Levelling Up Secretary allocated over £188m to support projects in Sheffield, Blackpool and Liverpool. Building upon this, the Chancellor announced the allocation of £242m of investments in Barking and Canary Wharf, which will build over 8,000 new houses, and “transform Canary Wharf into a new hub.”
The Chancellor also launched a new £20m community-led housing scheme, supporting local communities to deliver the development they “want and need.”
Inflation expected to dip below 2% ‘in next few months’
Inflation is set to fall below 2% in the next few months, according to the latest forecast from the Office for Budget and Responsibility. In his Budget speech today (6 March), Chancellor Jeremy Hunt said this was “nearly a year ahead” of what was previously forecast in the Autumn Statement.
Budget announcements for the property market
Short-term holiday lets: The government will abolish the Furnished Holiday Lettings tax regime, removing the current incentive for landlords to offer short-term holiday lets rather than longer-term homes.
This will “level the playing field between short-term and long-term lets” and support people to live in their local area. These tax changes will take effect from April 2025, and draft legislation will be published in due course.
Capital Gains Tax (CGT) changes: The government will implement a change to CGT to support the housing market. The higher rate of CGT for residential property disposals will be cut from 28% to 24%.
The lower rate will remain at 18% for any gains that fall within an individual’s basic rate band. The government's budget policy paper adds: “This will encourage landlords and second home-owners to sell their properties, making more available for a variety of buyers, including those looking to get on the housing ladder for the first time, while also raising revenue over the forecast period.”
Private Residence Relief will remain in place, meaning the vast majority of residential property disposals will pay no CGT.
Click here to read the full budget report on Gov.uk.
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The information contained within was correct at the time of publication but is subject to change.
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