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Christie HardingMar 28, 2024 1:24:24 PM2 min read

What does the spring budget mean to me as a home owner?

On 6th March 2024, Chancellor of the Exchequer, Jeremy Hunt announced the budget for the year ahead. Within this statement, a number of measures were announced mainly impacting second homeowners.

Stamp duty land tax (SDLT)

(SDLT) is the charge on the value of a property. For those who bought two dwellings within a single or linked transaction benefitted from SDLT multiple dwellings relief however this is being abolished from 1st June 2024.

What does this mean for me?

This means that if you are looking to buy multiple dwellings to rent out for example, you will no longer receive a SDLT relief if you buy multiple properties in a single transaction. The reason for this abolishment was deemed to be because independent research was showing that this tax relief was regularly being abused rather than being used to support investments into the private rented sector as it aimed.

Higher rate capital gains tax (CGT)

Mr. Hunt announced that the CGT higher rate was being reduced from 28% to 24%. CGT is a tax charged on the profit that you make when you sell an asset that has increased in value.

This is not charged on primary residence in the UK but is charged on additional properties such as second homes or buy-to-let flats.

What does this mean for me?

This can be taken in two ways. For multiple property owners, this could benefit them as if they sell their properties, they will pay less CGT on any profits. For renters however, this could cause a problem if the landlord wishes to sell the property now, they will receive a lower tax bill. This CGT reduction could be seen as an encouragement for landlords to sell up which will create a lot of worry for renters.

Furnished holiday lets (FHL)

The FHL tax regime relates to short-term rental properties that are available to be rented out for 210 days of the year and are actually rented for 105 days. The tax regime means that landlords can deduct the full cost of their mortgage interest payments from their rental income. Mr. Hunt announced in his budget that this was being abolished in April 2025 due to concern that it was creating a distorted vision that there were not enough properties available for long-term rent.

What does this mean to me?

This simply means that from April 2025, this tax regime will no longer exist so you will not be able to deduct mortgage interest payments from rental income. This will have significant impact on those operating holiday let businesses.

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The content of this Budget summary is intended for general information purposes only. While we believe this interpretation to be correct, it cannot be guaranteed and may be changed in the future. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor. The Financial Conduct Authority does not regulate tax advice.