Residential Property 2024 Budget Update

Please note that this News item is not maintained, and reflects the law as at the date of publication or update.

On 6 March 2024, the Chancellor, Jeremy Hunt, made several announcements which will affect residential property in the coming months.

A Stamp Duty Land Tax Relief known as Multiple Dwelling Relief, which gave purchasers of residential property an opportunity to take advantage of reduced SDLT when buying more than one dwelling in a single transaction or as linked transactions, is being abolished as from 1 June 2024.  The relief offered the potential for substantial savings as the total cost of the dwellings could be combined and a calculation made on a new ‘average’ price of the dwellings involved.   While this relief, at first glance, might have been thought to only benefit investors, it was also available as a relief in circumstances where annexes formed part of a transaction.  As a result of this change, and sadly for some, there will no longer be an opportunity to potentially reduce the Stamp Duty Land Tax liability for the purchase of residential property containing a granny annex.

A reduction in the rate of Capital Gains Tax has also been announced to take effect from 6 April 2024. The rate is to be reduced from 28% to 24%. This will benefit those who sell a property, other than a main residence, and should be considered carefully if potentially applicable.

Cancellation of the Furnished Holiday Lettings Regime, which afforded owners of properties used for holiday lets a number of tax advantages, such as offsetting mortgage interest payments against profits and potentially reducing income tax liability. has also been announced. This regime will no longer be effective as from 6 April 2025.

The effect of all of these measures will cause interest in an already uncertain property market. The hope is that the change to CGT rates and the removal of the holiday lettings regime will encourage the sale of second homes and/or rental properties and subsequently introduce more owner/occupied homes into the property market.

For more information, please contact Rory McColl.

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