There was much anticipation and speculation leading up to Rachel Reeves’ inaugural Budget as Labour Chancellor and the party’s first in 14 years. The mood music in the lead up centred around raising significant revenues for the Exchequer which would inevitably require raising taxes – the question was, which ones…
Much was being made of a Capital Gains Tax (CGT) increase being introduced on Buy To Let properties, but this was not implemented given concern that doing so could actually cost the Exchequer money instead of raising more revenue (as reported in The Times). Only 12% of CGT income is generated through property sales with the majority coming from the sale of stocks and shares. Therefore, CGT remains at 18%.
There were other changes, too, some of which were a surprise, not least of which the increase in Stamp Duty on Buy To Let properties. Here is a summary of some of the key property-related take outs:
Inheritance Tax
Reeves said she will extend the inheritance tax threshold freeze for a further two years to 2030. That means the first £325,000 of any estate can be inherited tax-free, rising to £500,000 if the estate includes a residence passed to direct descendants, and £1m when a tax-free allowance is passed to a surviving spouse or civil partner, she said.
She added that she will bring inherited pensions into inheritance tax from April 2027.
Stamp duty
Reeves announced that the government would increase the stamp duty land surcharge for second-homes by 2% to 5% the day after the Budget.
Right To Buy discounts
The Chancellor slashed the ‘Right To Buy’ discount given to those purchasing their council home.
New homes
The Chancellor says the government will invest more than £5bn to deliver their housing plan.
Affordable housing
She added this Budget will increase the Affordable Homes Programme to £3.1bn, provide £3bn worth of support and guarantees to increase the supply of homes and support small housebuilders.
(Source: Property Industry Eye)
