{"id":10603,"date":"2024-10-30T17:31:52","date_gmt":"2024-10-30T17:31:52","guid":{"rendered":"https:\/\/www.craneandco.co.uk\/pages\/?p=10603"},"modified":"2024-10-30T17:35:08","modified_gmt":"2024-10-30T17:35:08","slug":"what-the-budget-means-for-the-property-market","status":"publish","type":"post","link":"https:\/\/www.craneandco.co.uk\/pages\/what-the-budget-means-for-the-property-market\/","title":{"rendered":"What The Budget Means for the Property Market"},"content":{"rendered":"

With PM Keir Starmer warning it would be painful, the new government\u2019s first Budget has been hotly awaited for some weeks now.<\/span><\/h3>\n

In this article, we\u2019ll look at what the Chancellor of the Exchequer, Rachel Reeves, announced \u2013 paying specific attention to what will affect the property market.<\/p>\n

The Chancellor started by giving forecasts which suggest inflation will rise slightly, to 2%+, over the next few years. And that economic growth will be modest \u2013 only 1-2% yearly.<\/p>\n

She reminded us all about the infamous \u00a322bn \u2018black hole\u2019 and explained this would be filled by tax rises of around \u00a340bn.<\/p>\n

On a more upbeat note, she said the Budget was about economic stability and growth, investment and \u2018putting more pounds in peoples\u2019 pockets.\u2019<\/p>\n

While there was plenty more in the Budget, here\u2019s our round-up of some of the main property-related announcements.<\/p>\n

Capital Gains Tax<\/strong><\/span><\/h3>\n

Capital Gains Tax or CGT is payable on gains you make when selling an asset, such as property or a business. CGT rates are more favourable than Income Tax rates especially for higher rate taxpayers.<\/p>\n

It has been forecast for months that CGT rates would be increased. And, on the day, they were. The basic rate increased from 10% to 18%, and the higher rate increased from 20% to 24%. These changes apply from today, 30 October 2024.<\/p>\n

But there were no further increases to the rates on residential property, which were already at 18% and 24%, respectively. This might come as a relief to landlords, those with a second home, and also holiday home owners.<\/p>\n

IMPORTANT<\/strong>: CGT isn\u2019t payable when you sell your own home.<\/p>\n

Inheritance Tax<\/strong><\/span><\/h3>\n

Inheritance Tax or IHT is a tax your beneficiaries pay when you leave money and other assets to them when you die. It mostly concerns older homeowners thinking about how best to leave their home and money to their children.<\/p>\n

It was strongly rumoured pre-Budget there would be changes to IHT.<\/p>\n

It was thought by many in the \u2018know\u2019 that the Chancellor could raise the rate of IHT, reduce the tax-free thresholds or reduce or remove some of the allowances.<\/p>\n

The rumours turned out to be untrue, at least around how they affect residential property. IHT will continue at 40% on sums over \u00a3325,000 (the IHT threshold) for at least two years.<\/p>\n

There\u2019s no IHT to pay on anything left to spouses and civil partners, and a higher threshold applies to anything left to children. There are also some reliefs and exemptions for gifts given before you die, gifts to charity and some types of assets like agricultural land and property.<\/p>\n

There were some tweaks to the arrangements for inherited pensions and agricultural land.<\/p>\n

Stamp Duty<\/strong><\/span><\/h3>\n

Stamp Duty, or SDLT, is a tax payable when you buy property. Chancellors have loved to tinker with it in recent years. But Reeves resisted the temptation to make major changes.<\/p>\n

However, a significant tax increase was the rise in the higher rate of Stamp Duty. This will apply immediately and affect anybody who buys a second home, holiday home or a buy-to-let. The higher rate will increase from 3% on top of the standard rates to 5% on the standard SDLT rates.<\/p>\n

It is also worth noting that a temporary increase of \u00a3125,000 in the Stamp Duty threshold currently means it only kicks in at \u00a3250,000 or \u00a3425,000 for first-time buyers. This concession is due to end in spring 2025. There had been calls for it to be extended, but Labour seems to have dismissed them for now.<\/p>\n

In Scotland and Wales, some tax rules, including Stamp Duty, are set by their respective governments and have different bands and rates. The Westminster Budget won\u2019t affect those.<\/em><\/p>\n

Other announcements that might affect the property market<\/strong><\/span><\/h3>\n

Although these measures don\u2019t affect the housing market directly, whether we all feel better or worse off can and often does affect the market in the long term.<\/p>\n

The Labour manifesto pledged that income tax, national insurance (NI), and VAT wouldn\u2019t be raised in their first Budget, at least regarding working people. That promise was kept \u2013 sort of \u2013 although employers\u2019 NI contributions were increased.<\/p>\n

It was also announced personal income tax thresholds were to be upped in line with inflation after being frozen for some time \u2013 but not for another two years.<\/p>\n

Other property-related measures included reducing Right to Buy discounts for council house purchases. There was also \u00a3500m more investment into the Affordable Homes Programme, which might benefit that section of the market.<\/p>\n

Final thoughts<\/strong><\/span><\/h3>\n

It could be said that the Budget was a bit of an anti-climax. Some things had been announced or perhaps leaked in advance. Other rumours turned out to be just that \u2013 rumours.<\/p>\n

The Chancellor also pulled off the usual political magic trick of making even the negatives look like positives.<\/p>\n

At the end of the day, although the Budget has some major implications for the economy, it does not have as many impacts on the property market as might have been expected. So, it seems to be \u2018steady as it goes\u2019 for now.<\/p>\n

If you\u2019re curious about what the Budget will mean for your property\u2019s value or potential moving plans, we strongly recommend getting advice from an experienced estate agent, like us, and\/or a financial adviser.<\/p>\n

Do you have any friends or colleagues who might find this article helpful?<\/p>\n

Please feel free to share it with them.<\/p>\n","protected":false},"excerpt":{"rendered":"

With PM Keir Starmer warning it would be painful, the new government\u2019s first Budget has been hotly awaited for some weeks now. In this article, we\u2019ll look at what the Chancellor of the Exchequer, Rachel Reeves, announced \u2013 paying specific attention to what will affect the property market. The Chancellor started by giving forecasts which […]<\/p>\n","protected":false},"author":3,"featured_media":10606,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_themeisle_gutenberg_block_has_review":false,"footnotes":""},"categories":[12],"tags":[25,32],"class_list":["post-10603","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-news","tag-jerry","tag-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.craneandco.co.uk\/pages\/wp-json\/wp\/v2\/posts\/10603","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.craneandco.co.uk\/pages\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.craneandco.co.uk\/pages\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.craneandco.co.uk\/pages\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.craneandco.co.uk\/pages\/wp-json\/wp\/v2\/comments?post=10603"}],"version-history":[{"count":1,"href":"https:\/\/www.craneandco.co.uk\/pages\/wp-json\/wp\/v2\/posts\/10603\/revisions"}],"predecessor-version":[{"id":10605,"href":"https:\/\/www.craneandco.co.uk\/pages\/wp-json\/wp\/v2\/posts\/10603\/revisions\/10605"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.craneandco.co.uk\/pages\/wp-json\/wp\/v2\/media\/10606"}],"wp:attachment":[{"href":"https:\/\/www.craneandco.co.uk\/pages\/wp-json\/wp\/v2\/media?parent=10603"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.craneandco.co.uk\/pages\/wp-json\/wp\/v2\/categories?post=10603"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.craneandco.co.uk\/pages\/wp-json\/wp\/v2\/tags?post=10603"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}