What does the 2024 Autumn Budget mean for the property market?
November 2024
The 30th October 2024 saw the eagerly awaited announcement of the new Labour Government’s first budget by the Chancellor of the Exchequer, Rachel Reeves.
Prior to the budget, there was a great deal of speculation about the inclusion of hikes in Stamp Duty Land Tax (SDLT), Capital Gains Tax (CGT), Income Tax, Inheritance Tax and National Insurance as well as the potential impact of the budget on the economy, inflation, interest rates and of course house prices.
The changes that have been announced reflect the Government’s ongoing efforts to balance the budget, while promoting economic stability. Although significant adjustments to the tax landscape have indeed been announced, the consensus for the residential property market appears to be quite favourable.
Stephen Gardner MNAEA, Residential Partner, from our Honiton office commented: “Compared to the rest of the budget I think the housing market got off pretty lightly, albeit in a bittersweet way. A hike in stamp duty on second homes and investment property purchases to 5% is inconvenient but not terminal.
In relation to stamp duty for first time buyers and ‘normal’ buyers, the story is pretty similar. We can expect a surge before the New Year for those trying to complete before the stamp duty rises at the end of March, then I believe it will return to business as usual.
In terms of investments, retaining the 24% capital gains tax on residential investment property disposals can be seen as a bit of relief given that, at one point, it was thought that the Chancellor may apply capital gains tax to all property sales, including primary residences.”
Whilst the SDLT surcharge was increased by 2% to a rate of 5%, this will only apply to the purchase of second homes, impacting buy-to-let investors, or those looking to become second home owners. It may also have a bearing on the house prices in holiday hot spots, with a potential for the trends of locals being priced out of the market to be reversed.
Fortunately there was no mention of a change in SDLT levels for principal residences, with the thresholds set by the previous Conservative Government still in place for the time being. This means that many buyers can still find themselves exempt or paying less tax when purchasing properties under the current thresholds, making now the ideal time for sellers and buyers to make the leap to their next home.
There were also some updates to CGT. It was confirmed that there will be no increases to the rates on residential properties or the sale of second homes, with these remaining at 18% for basic rate taxpayers and 24% for higher rate taxpayers. However, the changes are set to impact those with business or agricultural assets. Reliefs for these types of assets will be reformed, with Inheritance Tax set at 20% for amounts exceeding £1 million. James Wotton MRICS, FAAV, Associate, from our Ivybridge office commented: “Whilst some subsidies and grants will remain, the changes in taxation, particularly inheritance tax are expected to have a significant impact on farmers and business owners who often look to pass their assets onto the next generation.”
It seems that now more than ever it is imperative for anyone involved with any type of property, including residential homeowners, investors, farmers and business owners, to stay informed in order to adapt and make informed decisions about their properties according to their individual circumstances.
Despite the challenges faced in recent years and months, the housing market continues to demonstrate remarkable resilience. As our economy continues to stabilise, adjust and grow, so too will the property market. This should give both sellers and buyers more confidence when faced with the decision about when is a good time to sell.
Simon Havens MNAEA, MARLA, Partner and Vice-Chairman based from our Yeovil office concluded: “The budget has removed much of the uncertainty of the past few months for many would-be movers who have been hanging on to see what might happen. As budgets go, it could have been much worse for the property market and has given buyers and sellers room to plan with some predictability.”
At GTH we have a broad range of services and depth of knowledge throughout our specialist teams. We can assist with any kind of property query or advice about the budget changes and how this might affect your property decisions.
So, whatever your circumstances, if you are considering selling your home, speak to our local property experts who would be delighted to assist. Find a list of all GTH offices and services across the West Country or book a free valuation.
Prior to the budget, there was a great deal of speculation about the inclusion of hikes in Stamp Duty Land Tax (SDLT), Capital Gains Tax (CGT), Income Tax, Inheritance Tax and National Insurance as well as the potential impact of the budget on the economy, inflation, interest rates and of course house prices.
The changes that have been announced reflect the Government’s ongoing efforts to balance the budget, while promoting economic stability. Although significant adjustments to the tax landscape have indeed been announced, the consensus for the residential property market appears to be quite favourable.
Stephen Gardner MNAEA, Residential Partner, from our Honiton office commented: “Compared to the rest of the budget I think the housing market got off pretty lightly, albeit in a bittersweet way. A hike in stamp duty on second homes and investment property purchases to 5% is inconvenient but not terminal.
In relation to stamp duty for first time buyers and ‘normal’ buyers, the story is pretty similar. We can expect a surge before the New Year for those trying to complete before the stamp duty rises at the end of March, then I believe it will return to business as usual.
In terms of investments, retaining the 24% capital gains tax on residential investment property disposals can be seen as a bit of relief given that, at one point, it was thought that the Chancellor may apply capital gains tax to all property sales, including primary residences.”
Whilst the SDLT surcharge was increased by 2% to a rate of 5%, this will only apply to the purchase of second homes, impacting buy-to-let investors, or those looking to become second home owners. It may also have a bearing on the house prices in holiday hot spots, with a potential for the trends of locals being priced out of the market to be reversed.
Fortunately there was no mention of a change in SDLT levels for principal residences, with the thresholds set by the previous Conservative Government still in place for the time being. This means that many buyers can still find themselves exempt or paying less tax when purchasing properties under the current thresholds, making now the ideal time for sellers and buyers to make the leap to their next home.
There were also some updates to CGT. It was confirmed that there will be no increases to the rates on residential properties or the sale of second homes, with these remaining at 18% for basic rate taxpayers and 24% for higher rate taxpayers. However, the changes are set to impact those with business or agricultural assets. Reliefs for these types of assets will be reformed, with Inheritance Tax set at 20% for amounts exceeding £1 million. James Wotton MRICS, FAAV, Associate, from our Ivybridge office commented: “Whilst some subsidies and grants will remain, the changes in taxation, particularly inheritance tax are expected to have a significant impact on farmers and business owners who often look to pass their assets onto the next generation.”
It seems that now more than ever it is imperative for anyone involved with any type of property, including residential homeowners, investors, farmers and business owners, to stay informed in order to adapt and make informed decisions about their properties according to their individual circumstances.
Despite the challenges faced in recent years and months, the housing market continues to demonstrate remarkable resilience. As our economy continues to stabilise, adjust and grow, so too will the property market. This should give both sellers and buyers more confidence when faced with the decision about when is a good time to sell.
Simon Havens MNAEA, MARLA, Partner and Vice-Chairman based from our Yeovil office concluded: “The budget has removed much of the uncertainty of the past few months for many would-be movers who have been hanging on to see what might happen. As budgets go, it could have been much worse for the property market and has given buyers and sellers room to plan with some predictability.”
At GTH we have a broad range of services and depth of knowledge throughout our specialist teams. We can assist with any kind of property query or advice about the budget changes and how this might affect your property decisions.
So, whatever your circumstances, if you are considering selling your home, speak to our local property experts who would be delighted to assist. Find a list of all GTH offices and services across the West Country or book a free valuation.