All eyes were on Chancellor Jeremy Hunt as he delivered the last Budget before the General Election. Were there any vote-winning announcements? Has it become cheaper to buy or sell a property? We answer your questions.
Q. Will it be cheaper to sell an additional property?
A. Yes. Property owners selling an additional dwelling have to pay a special tax on any profit they make and it’s this rate of tax that is being reduced. Currently, those selling a second or holiday home, or a buy-to-let investment, have to pay 28% higher rate tax on the profit. This percentage is being reduced to 24%.
Q. How will the Budget help the home moving market?
A. Although many of the Budget announcements did not relate directly to property, they were designed to put more money back into people’s pockets. A 2p cut in National Insurance will see a typical worker £450 better off annually, while more parents will be included in the Child Benefit scheme. Freezes to fuel and alcohol duty should also boost how much money people have to spend – giving them confidence that they can allocate finances to move home and afford mortgage repayments.
Q. Has there been a change to stamp duty thresholds?
A. Despite rumours that there would be a cheaper stamp duty bracket for ‘last-time-buyers’ – those downsizing from larger to smaller homes – the change never materialised. In a positive move, the Chancellor did not lower the stamp duty thresholds to generate more income, preferring to keep stamp duty rates the same.
Q. How about stamp duty relief?
A. There is some good news. The nil stamp duty bracket for first-time buyers remains in place. This means there is zero stamp duty to pay on the first £425,000 of a home’s purchase price, on properties worth £625,000 or less where the purchaser is a true first-time buyer.
What has changed is stamp duty relief for multiple dwelling purchases (known as Multiple Dwellings Relief). This tax break for those buying more than one leasehold or freehold dwelling at the same time has been abolished. The move will reportedly earn the Treasury £385 million more a year.
Q. I own a furnished holiday let, is there a change that affects me?
A. Yes. The Chancellor is scrapping the furnished holiday lettings (FHL) regime. This scheme saw owners of furnished holiday lets that were available to holidaymakers for at least 210 days a year, and which were let for at least half that time, pay less tax. The FHL tax break will end in April 2025, and the scrapping will generate approximately £245m a year for the Treasury.
The team here has digested what the Budget means for buyers, sellers, investors and landlords. If any aspect is still unclear to you, please contact us for clarification.
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