Spring Budget 2024: Five Vital Insights for Landlords

6 March 2024

The Spring Budget for 2024, unveiled by Chancellor Jeremy Hunt, holds significant implications for property professionals. As one of the two annual announcements on the UK economy's state, it provides an overview of government spending, revenue, and economic forecasts.

Here's a breakdown of the key highlights from the Spring Budget that letting agents and landlords should pay attention to:

1. Tax Cuts Impacting Holiday Homes and Multiple Dwellings:

  • Chancellor Hunt has abolished the furnished holiday lettings tax regime, aiming to deliver personal tax cuts. This move may result in holiday landlords potentially losing an average of £2,835.
  • The intention behind this action is to address the imbalance caused by insufficient rental properties available for local residents. Holiday homes, particularly prevalent in certain areas of England and Wales, have been subject to increased scrutiny.

2. Reduction in Capital Gains Tax (CGT):

  • The higher rate of property Capital Gains Tax is set to decrease from 28% to 24%, as announced in the 2024 Spring Budget.
  • This change affects individuals making profits from property sales, including buy-to-let properties, business premises, land, and inherited properties. Landlords could previously claim Capital Gains Tax relief, and profits from rent could count toward pension purposes.

3. Housing Commitments and Construction Targets:

  • The Conservative party reaffirms its pledge to build one million homes by the end of the Parliament, allocating £242 million to new house building initiatives.
  • Specific projects are earmarked for development in various regions, including Canary Wharf, Blackpool, Sheffield, Liverpool, and Cambridge. Housing construction targets have seen fluctuations over recent years, with the government restating its commitment to this ambitious goal.

4. VAT Threshold Increase for Small Businesses:

  • Plans to raise the VAT registration threshold from £85,000 to £90,000 have been announced. This adjustment, unchanged since 2017, is expected to benefit smaller business owners.

5. Additional Announcements Affecting Property Professionals:

  • Cuts to National Insurance contributions, with the rate reduced from 10% to 8% of pay, aimed at easing the tax burden for employers and employees.
  • Freeze on fuel duty at 53p per litre, resulting in savings of approximately £50 per year for the average car driver.
  • Emphasis on clean energy initiatives, including plans for 25% of homes to run on nuclear energy by 2050, with no major changes anticipated for energy bills in the immediate future.

The Spring Budget for 2024 sets forth a range of measures with significant implications for letting agents, landlords, and tenants alike. Staying informed about these developments is crucial for navigating the evolving landscape of the property market effectively.