Spring Budget 2024: key takeaways

The Chancellor Jeremy Hunt’s Spring Budget was a political (and noisy) affair given the upcoming election.

He made some large tax announcements, and some changes to policy which will affect property owners and investors.

Here we round-up some of the main announcements:

• Higher Rate of Capital Gains Tax on sale of residential property, which is not a primary residence, cut from 28% to 24% from 6 April 2024.

e.g. A property bought for £350,000 in late 2013 now selling for £520,000.

Total gains = £170,000 (in the higher rate tax bracket), taxable gains would be £167,000 with annual CGT allowance.

The change would mean the total CGT bill on the sale would be £40,080 (at 24%) rather than £46,760 (at 28%) a saving of more than £6,500

It will cost the Treasury £70 million in 2024/25, but it expects the move to bring in an additional £310 million the following year due to a rise in transactions.

This change could spur more sales activity, especially amongst landlords or those with more than one property who want to take advantage of these tax savings to sell their property. This increased stock could create opportunities for those looking to invest back into the market, especially in London and other urban centres.

• Multiple dwellings relief for stamp duty scrapped

Rules around stamp duty have allowed buyers to use the average value of properties bought in a linked transaction to reduce the total amount of stamp duty payable.

e.g. A buyer purchases 5 flats for £1 million. If this were a simple purchase for £1 million, then SDLT of £71,250 would be payable.

Under this relief, £1 million can be divided by 5, with each flat assigned value of £200,000. This means stamp duty payable at lower rate, £6,000 each x 5 = £30,000

The relief will not be available to sales which complete after 1 June 2024.

This move will affect larger investors who will have benefitted from this relief on bulk purchases.

• Furnished holiday lets regime scrapped

From 6 April 2025 short and long-term lets will be treated the same for tax purposes – so there will no longer be an advantage for those letting furnished properties for short-term rental.

This reflects the Government’s push to encourage more provision of long-term rental accommodation.

There was no mention by the Chancellor of stamp duty thresholds, meaning that if there are no more changes later in the year, the stamp duty holiday for first-time buyers who pay no stamp duty on the first £425,000  of a home purchase up to the value £625,000 will end in April next year.

It was also noticeable that the Chancellor did not announce any measures to help first-time buyers bridge the ‘deposit gap’ when buying a home, despite much talk of a 99% mortgage guarantee scheme. Perhaps this will be revisited in a manifesto.

In addition, the Chancellor announced:

• 2p cut in Class 1 Employee National Insurance, reducing the main rate from 10% to 8% from 6 April 2024, and cut in Class 4 self-employed NICs from 8% to 6% from 6 April 2024.
• Ending of the Non-Dom status for tax from 6 April 2025, replacing it with a residence-based system – with a new relief on overseas income and gains on first four years of residency.
  IHT for these individuals will also be moved to a residence-based system, not before April next year. This is the most lucrative move in the Budget – it is expected to raise £2.8 billion by 2026/27 and £3.6 billion in 2027/28
• Business Rates: extending the Empty Property Relief “reset period” from six to 13 weeks from 1 April 2024. Our head of rating Gareth Buckley will be sharing a more detailed newsletter on all matters business rates. To receive a copy, email Lisa Glancy.

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