The Chancellor of the Exchequer presented his Spring Budget 2024 to Parliament on Wednesday 6 March 2024, the anticipation surrounding its potential effects on the property market was palpable, especially amidst the lingering economic uncertainties. While many speculated on radical changes, the Budget largely aligned with expectations, offering no ground-breaking surprises. Notably absent were previously floated ideas like the 99% mortgages.
While the budget may not have been ground-breaking, it still contains important information for those involved in property transactions especially, Landlords. If you’re thinking of buying property in Virginia Water, browse our properties available in Virginia Water and the surrounding areas. If you have any questions, you can also visit our award-winning website or call us on 01344 843000 and email us.
The key outtakes to note from the Spring Budget 2024 for April onwards for the Property Market are;
Capital Gains Tax Reduction
From this week, the higher Capital Gains Tax rate on residential property will see a reduction from 28% to 24%. This adjustment aims to stimulate property sales and boost revenue. Notably, the lower rate of Capital Gains Tax will remain at 18%.
While this change may encourage property transactions, it’s essential for individual investors to carefully assess its implications on their own investment strategies, financial goals, and tax liabilities.
Empty Property Relief Extension
Effective from now, the Empty Property Relief “reset period” will be extended from six weeks to thirteen weeks in England. This aims to deter “box shifting” practices among landlords seeking to exploit empty property relief repeatedly. Landlords should acquaint themselves with these changes to avoid any unintended consequences.
Multiple Dwellings Relief Abolition
The Budget also brings abolition of multiple dwellings relief for stamp duty land tax, impacting purchasers of multiple residential properties. This change, while designed to address certain market dynamics, may present challenges for large portfolio landlords navigating property transactions.
Additionally, it may also impact those purchasing properties with annexes. Previously, multiple dwellings relief often applied to properties with annexes, allowing stamp duty calculations to be based on the average value of the annexe and main property. This approach often optimised stamp duty tax thresholds, resulting in significant tax savings. However, going forward, this option will no longer be available. If you feel this will affect you and you’re concerned, contact our expert team today to talk through your options.
Furnished Holiday Lettings Tax Abolition
The furnished holiday lets regime, offering tax advantages for holiday home landlords, will be abolished from April 2025. This shift is attributed to the belief that holiday lets reduce the availability of long-term rentals for residents. Holiday let owners will lose several benefits, including the ability to deduct mortgage interest payments and other tax-advantaged contributions. Such alterations may prompt landlords to reconsider their investment strategies, weighing the benefits against potential drawbacks. If you’re a landlord with a short term/holiday let, get in touch today and we can guide you through the right decision for you and your property.
While some changes offer relief to homeowners and those looking to sell, the removal of tax relief schemes may be a concern to some buy-to-let investors. However, the demand for rental property is still higher than available property so with rent increasing and less competition in the market, a buy-to-let can still be profitable and there’s good news on the horizon – The Bank of England predicts that inflation will be below 2% by June, likely leading to further drops in mortgage rates, lightening the burden for property investors and homeowners.
Understanding the implications of these budget measures is crucial for landlords, investors, and prospective property purchasers alike. Whether you’re already immersed in the property market or contemplating your entry, staying informed is key to making informed decisions.
At Barton Wyatt, we’re committed to providing expert guidance tailored to your property investment needs. If you’re unsure about how the Spring Budget changes may affect you going forward, ensure to reach out to us. Our team is here to help you navigate the evolving landscape and make sound investment decisions aligned with your goals.
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If you are thinking of moving in or out of the area, make sure you take a look at our amazing catalogue of properties for sale in Virginia Water and the surrounding areas. If you’d like to speak to someone about properties to let in Virginia Water, a member of our expert team would be happy to help. You can call us on 01344 843000 or email us. You can also follow us on Facebook, Twitter, Instagram, and LinkedIn.
