Key Takeaways from the Autumn Budget 2024

🚨 Key Takeaways from the Autumn Budget 2024 for Landlords & Property Investors 🚨

Today’s Budget, delivered by Chancellor Rachel Reeves, brings critical updates impacting property investments, landlord taxes and estate planning. Here’s what landlords and property investors need to know:

📈 Stamp Duty Increase on Second Homes:
Starting tomorrow, Stamp Duty Land Tax (SDLT) on second homes will increase from 3% to 5%. This rise is expected to impact the property investment landscape significantly, potentially discouraging new landlords and limiting portfolio expansion. With fewer landlords entering the market, experts warn that rental stock may reduce, driving up rents as supply tightens.

💼 Capital Gains Tax (CGT) Changes:
While the Chancellor announced increases in Capital Gains Tax, the rates for residential property remain unchanged at 18% and 24%. However, other CGT rates see a jump: the basic rate climbs from 10% to 18%, and the higher rate goes from 20% to 24%. By exempting residential property, the Budget provides some relief for landlords considering a sale, maintaining stability in CGT specifically for the housing sector.

🏡 Inheritance Tax (IHT) Freeze Extended:
Inheritance Tax (IHT) thresholds remain frozen until 2030, keeping the tax-free allowance at £325,000 per individual or up to £1 million when allowances pass to a surviving spouse. Additionally, inherited pensions will become subject to IHT from April 2027, affecting estate planning strategies. Landlords and investors may need to consider alternative strategies to protect inheritance value amid these freezes and new rules.

🏛️ Non-dom Tax Status Abolished:
Ending “non-dom” status is a historic change, requiring all UK residents to pay tax on their global income. Previously, “non-doms” could shelter foreign income and assets from UK tax, making the UK attractive for wealthy international buyers. This shift is expected to impact London’s prime property market, possibly reducing demand from high-net-worth individuals who previously enjoyed tax breaks.

🔑 Employer’s National Insurance Contributions:
From April 2025, the employer National Insurance rate will increase from 13.8% to 15%, and the threshold for contributions will drop from £9,100 to £5,000. The Chancellor aims to ease this change by raising the Employment Allowance from £5,000 to £10,500, meaning 865,000 employers will pay no NI next year, while another million will pay the same or less than before. For landlords employing staff or estate agents managing payroll, this change requires strategic financial planning.

It is believed that The Autumn Budget reflects a move toward long-term economic growth and tax fairness, particularly within the property market. The changes, especially to Stamp Duty and NI, are expected to affect cash flow, portfolio growth, and tax planning for landlords and investors. Stay informed and prepared as some of these policies come into effect tomorrow.