Key Points From The Budget

Whether or not this was the current governments last budget remains to be seen and and for landlords, there is a lack of noteworthy developments. Here are key highlights from the Spring Budget:

Capital Gains Tax cut 

On a positive note, there is a reduction in the Capital Gains Tax (CGT) rate from 28% to 24%. This adjustment is beneficial for landlords contemplating the sale of their rental properties. CGT is applied to the profit made from selling an investment property, with the rate now reduced.

As a broad example, you paid £150,000 and are now selling at £200,000, CGT will apply to the £50,000.

Seeking assistance from an accountant or tax specialist may help minimize the CGT liability.

Multiple Dwellings Relief Abolished

Landlords engaged in purchasing multiple residential properties simultaneously in linked transactions will be affected by the elimination of Multiple Dwellings Relief.

Tax adjustments for Short Term Let Landlords

Landlords in the holiday let market will face tax adjustments as the furnished holiday lettings tax system is set to be removed in April 2025.

This change aligns with efforts to tighten planning requirements for short-term lets, aiming to redirect properties back into the long-term private rented sector.

House Price Predictions

The Office for Budget Responsibility are predicting that house prices will not fall as dramatically as first thought. They suggest just 2% in 2024.

At the same time they predict that mortgage interest rates are unlikely to rise as sharply.

There is always a silver lining!

It’s crucial to note that this information is not exhaustive, and landlords are advised to consult qualified professionals such as tax specialists or accountants for personalised guidance.

Generally the housing industry appears to have  reacted with what amounts to a shrug of the shoulders at a lack policies focused on private landlords.

We were interested to note that Generation Rent, the activist group who champion for tenant rights, slammed the cut in Capital Gains Tax. Describing it as a “giveaway to landlords” the group claim that this will make thousands of tenants homeless. The basis of their argument being that landlords are now more likely to sell, further depleting available properties to rent.

It seems hard to square this against their persistent criticism of landlords and their aim to drive more properties back into the arms of owner occupiers. But there you go, that’s another story for another day.

Please note the date this article was published as the law or the essence may have changed since it was posted. You should always seek independent legal advice if you are intending to rely on any of the contents. Unless stated otherwise this article only reflects the position for the Private Rented Sector in England and therefore may not apply to other countries within the United Kingdom.