What does the Budget 2024 mean for you?
After months of speculation of a "painful" Autumn budget Chancellor Rachel Reeves finally delivered her plan this week. But was it as painful as we were expecting and what do the changes mean for homeowners and those wanting to get on the property ladder?
STAMP DUTY
From October 31, 2024, the Stamp Duty surcharge for second homes, buy-to-let, and company purchases will rise from 3% to 5%. This increase is intended to help prioritise primary home purchases.
First time buyers - If you’re able to purchase a home, consider acting before April 2025 to potentially save on costs.
Point at which house buyers start paying stamp duty on a main home to drop from £250,000 to £125,000 in April, reversing a previous tax cut
Threshold at which first-time buyers pay the tax will also drop back, from £425,000 to £300,000
CAPITAL GAINS TAX
Capital Gains Tax for non-residential assets will rise at its lowest rate from 10% to 18% and the higher rate from 20% to 24%. But there will be NO change to Capital Gains Tax for residential property – which already has 18% and 24% rates.
Although CGT is increasing, the rate on residential properties will not change. This means letting agents and landlords will not be affected if they choose to sell up.
INHERITANCE TAX
Inheritance Tax threshold, frozen until 2028 by Rishi Sunak, will be extended to 2030. The first £325,000 of any estate can be inherited tax-free, rising to £500,000 if the estate includes a residence passed to direct descendants, and £1million when a tax-free allowance is passed to a surviving spouse or civil partner.
5,000 ADDITIONAL HOMES
To address the urgent need for affordable housing, the Chancellor has committed an additional £500 million to build 5,000 new social homes, raising the total affordable housing budget to £3.1 billion per year. This funding boost is a step toward the government’s ambitious plan to create 1.5 million homes over the next four years. A comprehensive, long-term housing strategy is expected in 2025, which should provide more details on meeting these targets.
The government also emphasized a priority on increasing the availability of social rent homes. However, this shift could impact funding for other affordable housing options like shared ownership and First Homes, unless additional resources are allocated.
CHANGES TO RIGHT TO BUY
While the Right to Buy scheme remains in place, the Chancellor announced changes allowing local councils to reinvest 100% of sales revenue into new housing (up from 50%, with the other half previously directed to the Treasury). Other adjustments include a longer residency requirement to qualify for the scheme, reduced discount levels, and the exclusion of newly built council homes from Right to Buy.
