The Chancellor delivered his 2024 Spring Budget on 6 March, presenting a ‘Budget for long-term growth’ in the face of an upcoming general election.
Changes to how certain properties are taxed could have a significant impact on owners, including those of residential and holiday properties – and could leave some property owners seeking to sell up.
Our Property team takes a look at the upcoming changes and how owners could be affected.
Capital Gain Tax
From 6 April 2024, higher rate taxpayers will be subject to a lower rate of Capital Gains Tax (CGT) on residential properties.
Currently, gains made on the sale of residential properties are subject to a special rate of CGT of 28 per cent for those who pay tax at the higher rate (with an income of £50,271 or more).
The Chancellor’s new measure will bring this rate down to 24 per cent, with the basic rate unchanged at 18 per cent.
The aim of this policy is to encourage and incentivise disposals of second homes and buy-to-let properties and enhance the residential property market for homebuyers.
We can support you if you are seeking to sell a residential property to make the most of this latest relief.
Multiple Dwellings Relief
A key relief for Stamp Duty Land Tax (SDLT) has been abolished in the Spring Budget.
Multiple Dwellings Relief (MDR) will cease on 1 June 2024. This means that anyone purchasing two or more properties in a single or linked transaction will no longer be eligible for SDLT relief on this basis.
The Chancellor said that little benefit has come from MDR under its original goal of reducing barriers to investment in residential and rental properties.
Please contact our team for advice on buying multiple properties or purchasing investment properties. We can advise on the conveyancing process and make sure you meet your legal obligations under new rules.
Furnished Holiday Lets tax regime
Following consultations with a number of MPs from key constituencies, the Chancellor outlined the abolition of the Furnished Holiday Lets (FHL) tax regime.
The measure comes as those in holiday hotspots raise concerns over the supply of residential homes in areas such as Devon, Cornwall and the Southeast coast.
Previously, owners of qualifying properties were eligible to be taxed under special rules which carried significant tax advantages, including:
From 6 April 2025, the FHL scheme will be abolished.
The implications for holiday let owners could be wide ranging, including making owning a holiday let financially unviable for those without significant reserves to cover additional costs.
In collaboration with a lower level of CGT for higher rate taxpayers, the Chancellor hopes to encourage early disposal of holiday homes or second properties and therefore enhance the housing market in local areas.
If new regulations mean that you are looking at selling a property that is no longer viable, our team can provide expert advice on conducting your legal due diligence and going through the conveyancing process.
For expert, tailored advice, please get in contact with us today.
