The Spring Budget March 2024

This year’s Spring Budget, announced by Jeremy Hunt the Chancellor was very much anticipated by the property market - given it could be the last before the next General Election. There were calls for Stamp duty cuts and the return of 99% mortgages to help the housing market. Instead, it was cautious and vigilant.  The needs of the rental market has been very much in the spotlight for both landlords and tenants. On a postive note the economy has remained resliant and strong there is a feeling that this will continue, which will enable interest rates to slowly reduce which will help the housing market further.  So what were the key announcements of 2024 Spring Budget

Furnished Holiday Lets Tax Relief Abolished
The Chancellor’s decision to abolish tax relief for furnished short term holiday lets was a deliberate step to boost long-term rental availability, especially in areas of high demand like London in prime areas and to help rural areas where many of the second homes lay vacant especially in off peak times of the year. It’s hoped that first time buyers and renters may benefit with additional stock, but this will take time as the relief is being abolished in April 2025. However, this move is not so good for landlords or those with second homes who ventured into holiday or short term lets, previously enticed by its tax advantages.

Capital Gains Tax Reduction
The budget gave one small incentive such as a reduction in Capital Gains Tax (CGT) from 28% to 24% for sales of residential properties by higher or additional rate taxpayers with the CGT tax-free allowance is set to be halve from £6,000 to £3,000 in April. This reduction is of some comfort to  landlords who are facing challenging conditions and continued tax pressures.  Many landlords are now opting to own there property portfolios through limited companies which is encouraged by the government and have some associated tax relief systems in place .

Multiple Dwellings Relief Axed
The termination of Stamp Duty relief for purchasing multiple properties in a single transaction was hoped to stop large scale development being bought up by foreign investors. However, this sector has been under a huge strain due to many tax incentives such as the Multiple Dwellings Relief (MDR) being taken away and lack of tax incentives for private landlords investing in the private rental sector.

Scrapping non-dom tax rules
This decision risks damaging the appeal of the prime London property market amongest international investors. Labour was already pushing to scrap non-dom status, so the Chancellor got there first. However, we hope that this move is not short sighted as international property investment is very important to the UK economy.

Other announcements in the Budget was targeted to the working individual and included :
National Insurance dropping from 10% to 8% for employees, and from 8% to 6% for the self-employed
The VAT-charging threshold for those with a business is rising to £90,000 - up from £85,000

For more information visit the Government Website  The Spring Budget 2024