Autumn Budget 2024: Key Changes for Homeowners, Landlords & First-Time Buyers
The Autumn Budget announced on October 30th included several key updates that will affect homeowners, first-time buyers, and landlords. The main changes relate to Stamp Duty and Capital Gains Tax but we have summarised the main points below:
- No change to Capital Gains Tax (CGT) on residential property
Contrary to many expectations, CGT on residential property sales will remain unchanged at 18% for those taxed at the basic rate and 24% for those on the higher rate. However, CGT on non-residential assets such as shares and commercial property was immediately increased to 18% and 24% (up from 10% and 20%).
- Nil-band of Stamp Duty reduced
Stamp duty thresholds were temporarily raised in 2022, but these will revert to their previous levels at the end of March 2025. This means that from 1 April 2025, stamp duty will be payable for any purchases above £125,000 rather than £250,000, increasing the tax bill for the majority of buyers
- Changes to Stamp Duty for First-Time Buyers
From 1st April 2025, the Stamp Duty threshold for first-time buyers – which was also temporarily raised in 2022 - will drop from £425,000 to £300,000, and the maximum property value to be eligible for relief will drop from £625,000 to £500,000. This is likely to disproportionately affect first-time buyers in London.
- Increase in Stamp Duty for Additional Properties
Effective from the 31st of October, the Stamp Duty surcharge when buying additional properties (i.e. second homes and rental investments) increased from 3% to 5%. This surcharge applies to the entire purchase price of additional residential properties, including those valued up to £250,000.
- Increased Stamp Duty for Companies Purchasing Properties
The flat rate of Stamp Duty payable by companies and other ‘non-natural persons’ when purchasing residential properties worth more than £500,000 has increased from 15% to 17%.
- Inheritance Tax (IHT) Threshold Frozen
The IHT threshold will remain frozen at £325,000 until 2030.
- Abolition of Non-Dom Tax Status
Non-dom status, and its associated tax benefits, will be removed from April 2025. Some believe that this move could make the UK a less attractive base for some high-net-worth international buyers and could have an impact on the top end of the property market.
- Annual Tax on Enveloped Dwellings (ATED) increased
The annual ATED charge will be increased by the September 2024 CPI figure of 1.7% for the 2025/26 chargeable period:
In summary
The stamp duty rates in England until 31 March 2025 are as follows:
(1) Rate applies to relevant portion of the purchase price. (2) The £425,000 first-time buyer stamp duty threshold does not apply if the property purchased costs more than £625,000 – if it does, the £250,000 threshold applies
From 1 April 2025, the stamp duty rates in England will be changing to:
(1) Rate applies to relevant portion of the purchase price. (2) The £300,000 first-time buyer stamp duty threshold does not apply if the property purchased costs more than £500,000 – if it does, the £125,000 threshold applies.
