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Following the Autumn Budget, Stags Professional Services have outlined the impact that changes will have on agricultural properties. To read the full article relating to agricultural properties, please click here. It is also useful to highlight changes that affect residential properties.
Purchasing a property or land incurs a Stamp Duty Land Tax (SDLT), the amount you pay depends on the property or land value.
One headline from the Autumn Budget is undoubtedly SDLT. Changes have come into effect from 31st October 2024 with the higher rate surcharge for additional dwellings, normally payable on the purchase of second homes or investment property, rising to 5% from 3%. The increase on a £500,000 purchase price will be £10,000 - a not inconsiderable sum and likely to tighten budgets for second home buyers whilst buy-to-let investors may be thinner on the ground. The immediacy of this hike could be painful and there will undoubtedly be challenges to face with existing agreed sales and the negotiation of new sales. As ever, the knowledge and skills of your agent will be paramount.
Staying with Stamp Duty, the Government has also reversed a number of temporary SDLT measures introduced by the previous government in 2022:
It is worth noting that many second homes are facing a 100% increase in council tax, with effect from 1st April 2025.
Capital gains tax (CGT) is charged when an asset, in this case property, is sold. The amount of CGT paid is based on your tax bracket, as well as how much the property price has increased by since its purchase. CGT looks at the original purchase price of the property, and compares it to what the property is now sold for, and it is this difference in price that CGT is based on.
In an unexpected and very welcome move, CGT rates on residential property have remained unchanged. Higher-rate taxpayers will continue to pay 24% on the disposal of a residential property and the basic-rate liability remains at 18%. This scenario could have been far worse and thankfully is at odds with pre-budget speculation.
Finally, the 2024 Spring Budget had announced the abolition of the furnished holiday lets regime, with effect from April 2025. The Budget confirmed this measure, with draft legislation published. Under the current regime, furnished holiday lettings are treated as a trade and so property owners are able to claim deductions such as capital allowances and capital gains tax reliefs (notably Business Asset Disposal Relief at a rate of 10%). However; from April 2025, these benefits will cease and furnished holiday let owners will be subject to standard residential Capital Gains Tax Rates.
For further advice on how the Autumn Budget may be affecting your sale or letting property, please do not hesitate to contact the knowledgeable team at your local Stags office.
