Budget Update From Our Recent Property Recruit, Solicitor Kelsey Greenwood-Penny

Budget Update From Our Recent Property Recruit, Solicitor Kelsey Greenwood-Penny

The first Labour Government Budget in 14 years was delivered as part of a historic speech given by Chancellor Rachel Reeves on Wednesday, but what exactly does this mean for the property market?

The announcements can be divided into three parts as follows:

1. Stamp Duty Land Tax (SDLT)

SDLT is a tax payable when purchasing property. The amount of tax is determined by the value of the property and how many properties are owned.

The changes mean that if you are purchasing a second property, the SDLT surcharge applicable is 5%, compared with the pre-budget former surcharge of 2%. Simply put, this means that more tax will need to be paid on completion of your purchase, if for example, you are a landlord purchasing another buy to let property.

Whilst this will affect all investors of additional property, those looking to expand their portfolios the most will be the hardest hit.

2. Capital Gains Tax (CGT)

Despite an increase to CGT on non-residential assets such as stocks and shares, the good news is that the rates of CGT on residential dwellings remain unchanged, contrary to some pre-budget predictions. Hopefully, this might help to calm the market in light of the pre-budget sales surge, through fears of a potential rise, and the SDLT increase.

3. Inheritance Tax

Changes were also announced to Agricultural Property Relief (APR) and Business Property Relief (BPR), inheritance tax provisions affecting certain types of property. The changes mean that when disposing of properties within these categories, the rates of relief that can be claimed over £1m worth of assets have changed.

Additionally, a further £5bn has been allocated to the Government’s Housing Plan, with the aim of strengthening the Affordable Homes Programme, increasing the supply of homes, and supporting small housebuilders and new housing projects.

For help with navigating these changes, please contact [email protected].

Our blogs and articles are correct at the time of writing.

These have been created for marketing purposes only and should not be considered as legal advice.