On 30 October 2024, Chancellor of the Exchequer, Rachel Reeves, announced Labour’s first budget in 14 years with a number of key points pertinent to the property industry.
Capital Gains Tax (CGT)
There is no change to Capital Gains Tax on Residential Properties (18% and 24%), which was heavily hinted at by the media in the period leading up to the budget. For those with 2nd homes, this is a huge positive.
As expected, the main rates for Capital Gains Tax for non-residential property have increased. The basic taxpayer will rise from 10% to 18% and the higher taxpayer will rise from 20% to 24%. The trigger point for this is today, 30th October 2024. However, there are certain provisions for properties that have exchanged contracts prior to today, where a delayed completion has been agreed.
Stamp Duty Land Tax (SDLT)
There is some change to Stamp Duty Land Tax for first-time buyers and those seeking to move home. Stamp Duty is now due on purchases above £125,000 as opposed to £250,000, which will take effect from 31st March 2025. Similarly, first time-buyers will be required to pay Stamp Duty Land Tax on property purchases above £300,000 as opposed to £425,000 as it currently stands, again, taking effect from 31st March 2025. It was widely speculated before the Budget that either abolishment or temporary relief would be applied. However, this has not been discussed, nor was it included as a decision within the budget.
Though, surprisingly, there is an increase in Stamp Duty Land Tax (SDLT) for the Higher Rate payer for an Additional Dwelling (HRAD) from 3% to 5% and this comes into effect from today, 30th October 2024.
Agricultural Property Relief and Business Property Relief (APR & BPR)
The government has decided to reform inheritance tax relief. Currently, most Agricultural or Business Property attracts 100% relief from Inheritance Tax.
However, the Chancellor confirmed that from the 6th of April 2026, those with Agricultural or Business Property will be liable for Inheritance Tax. The current 100% rate of relief will continue to the first £1million of combined Agricultural and Business Property. Any amount over £1million will be subject to 20% Inheritance Tax.
It is important to note that the changes come into effect on 6th April 2026 and there will be a consultation in early 2025, although this relates to discretionary trusts.
Conclusion
Clearly these changes will have a substantial impact on our clients and therefore, should you wish to speak to any of the team at BCM Wilson Hill to discuss your options, please do not hesitate to contact us.
CONTACT
If you have any queries, please contact BCM Wilson Hill
Isle of Wight: Tom Dawson: 01983 828 800 tdawson@bcmwilsonhill.co.uk Winchester: Andrew Bays: 01962 763 900 abays@bcmwilsonhill.co.uk
This is not tax advice and BCM Wilson Hill are not tax advisors and therefore we recommend you speak to your specialist tax advisor for more information specifically tax related.
