The UK’s Autumn Budget 2024 introduces a number of significant changes that may impact you currently or in the near future. Below are the key takeaways from the budget and what they mean for you.
Increased Stamp Duty for Second Homes and Business-Owned Properties
From October 31, 2024, the Stamp Duty Land Tax (SDLT) surcharge on additional properties—including buy-to-let investments, second homes, and properties purchased by businesses—will rise from 3% to 5%. This change means that:
• The stamp duty surcharge will increase purchasing costs for landlords and investors. For example, buying a property valued at £300,000 as an additional property would now involve a £15,000 surcharge instead of £9,000.
• The new rates for additional properties are now:
• 5% on property portions up to £250,000
• 10% on portions from £250,001 to £925,000
• 15% from £925,001 to £1.5 million
• 17% on portions over £1.5 million.
As mentioned above these thresholds are now active so any current transactions you have will be affected. These thresholds are set to change again in April 2025 to the following:
- 5% on property up to £125,000
- 7% for the next £125,000 (the portion from £125,001 to £250,000)
- 10% for the next £675,000 (the portion from £250,001 to £925,000)
- 15% for the next £575,000 (the portion from £925,001 to £1.5 million)
- 17% for the remaining amount (the portion above £1.5 million)
Stamp Duty Relief Ending Soon
As discussed in our blog titled ‘An end to the temporary Stamp Duty Thresholds’, back in August, the budget confirmed that the current elevated stamp duty threshold will end in April 2025, after which the relief threshold will drop back to the pre-COVID levels. This is significant as it will cause all potential buyers to assess their budget to evaluate what they can afford. As this change doesn’t come into force till April 2025 it is important to plan ahead to mitigate any potential problems. (for further details see the aforementioned blog on our website)
Capital Gains Tax (CGT)
The other major change from this year’s budget is the rise in the CGT thresholds for assets other than residential property. The lower rate has been increased from 10% to 18% whilst the higher rate will rise from 20% to 24%. As with the stamp duty, these changes have been brought in from the day of the budget and affect all current transactions.
What This Means for You
With these changes, the property landscape is evolving quickly. Here are a few key takeaways:
• Landlords and Investors: Higher SDLT on additional properties may prompt a review of portfolio strategies. Those looking to buy additional properties might consider doing so before October 31, 2024, to avoid higher stamp duty costs.
• First-Time Buyers: The deadline for elevated stamp duty relief means it could be beneficial to complete purchases before April 2025. For clients needing guidance, we can help streamline the conveyancing process to meet these timelines.
• Clients Selling Properties: Higher rates require more forward planning and potential budgeting that wouldn’t previously be done pre-budget.
These changes make it more important than ever to discuss your existing and future transactions with a solicitor. Our conveyancing professionals are here to ensure your transactions are as smooth and efficient as possible amid these new regulatory changes.
The contents of this post do not constitute legal advice and are provided for general information purposes only.
Associated photo designed by Freepik.
The contents of this post do not constitute legal advice and are provided for general information purposes only ■
