Spring Budget 2024: What you need to know
Here’s what agents and landlords need to know about the proposed 2024 Spring Budget.
Jeremy Hunt, the Chancellor of Exchequer, gave what is believed to be the last budget announcement from the current government on March 6th. The Spring Budget is one of two annual announcements regarding the state of the UK economy, such as an overview of government spending and revenue gathering.
Listed below are the top 5 plans you should note:
1. Tax cuts for holiday homes and multiple dwellings to affect landlords
Hunt has abolished the furnished holiday lettings tax regime to help deliver personal tax cuts and to avoid the “distortion of not enough properties to rent for local people”. This change means that holiday landlords could lose an average of £2,835.
In 2023, the Welsh Government announced a new licensing scheme for holiday lets to “address the negative impact second homes and short-term holiday lets can have on the availability and affordability of housing for local people”.
This means that all visitor accommodation must meet certain requirements to qualify as a holiday let property.
2. Capital Gains Tax cut to affect landlords and buy-to-let market
Capital Gains Tax applies to properties when a person makes a profit from selling a property which is not their main home. This includes buy-to-let properties, business premises, land and inherited properties.
The Chancellor has announced that the rate of Capital Gains Tax will be reduced from 28% to 24% in the 2024 Spring Budget. A move which Business Editor at the BBC, Simon Jack called a “surprise”.
The Budget has also abolished the multiple dwellings relief (MDR). This is available to people who buy more than one residential property at a time and it’s likely that the relief of MDR will affect larger landlords and the buy-to-let sector the most.
3. Commitment to build million homes this parliament
During the proposal, Hunt re-affirmed the Conservative party’s aim to build one million homes by the end of the Parliament. For which they have allocated £242 million to new house building.
However, its specific projects are mostly focused in England, such as in Blackpool, Sheffield, Liverpool, Cambridge and the Canary Wharf area of London.
4. Small agencies may benefit from VAT threshold increase
Plans to increase the VAT registration threshold from £85,000 to £90,000 have also been announced. The threshold, which has remained unchanged since 2017, would be a popular move with small business owners, such as small, independent agencies.
5. Other announcements that may affect individuals in PRS
Further announcements made in the 2024 Spring Budget that may affect letting agents and landlords include:
– National Insurance contribution rate reduced from 10% to 8%. This intends to reduce the high tax burden and will benefit agents, landlords and tenants.
– Fuel duty has been frozen to stay at 53p per litre, saving an estimated £50 per year for the average car driver.
– No huge changes regarding energy bills are expected, but Hunt proposed intentions to focus on clean energy with the aim of 25% of homes running on nuclear energy by 2050.
Get in contact with one of our team members to advise you on your next move if you are affected by any of the above.
