The 2024 UK budget was always going to be a landmark moment. Labour’s first in 14 years following their General Election win and the first ever budget delivered by a female. Rumours circulated prior to the budget that billions were to be raised via tax hikes, but how has this specifically affected property related taxes? Now the dust has settled from the budget, Home Property Law’s Tom Jones looks at the impact on residential conveyancing matters.
Adjustments to Stamp Duty Land Tax will affect companies and buyers of additional properties immediately. The surcharge on additional properties rose from 3% to 5% for all matters that had not exchanged prior to the 31st October. The rate for companies purchasing residential property over £500,000 will also jump from 15% to 17%. Further, in April 2025 the previous increase to the threshold of £250,000 is set to revert back to £125,000. This will have a wide reaching impact and will affect almost all home buyers, most notably first time buyers. Currently first time buyers only pay stamp duty on property purchases over £425,000, this will be reduced to £300,000. Further, first time buyer relief will only be available for properties valued at £500,000 or less (a reduction from the current £625,000).
If you own more than one property and sell one which is not your main residence, you may be liable for Capital Gains Tax (CGT). Whilst rates for CGT have increased, there have been no changes to the rates applied to the disposal of second properties, staying at 18% for the lower rate and 24% for the higher, which itself was reduced from 28% in the Spring Budget in March.
These measures reflect the government’s approach to “balance the books” with fiscal responsibility and will affect the vast majority of property transactions from 1st April 2025 moving forwards.
If you have any questions, or would like to talk further about how the budget has impacted residential conveyancing matters, get in touch with our team at [email protected]
