Spring Budget
Here are the top key takeaways from the spring budget that landlords should note...
Tax cuts for holiday homes and multiple dwellings to affect landlords
In order to help deliver personal tax cuts, the Chancellor has abolished the furnished holiday lettings tax regime. This change means that holiday landlords could lose an average of £2,835. The aim for this clampdown would be, according to Jeremy Hunt, to avoid the “distortion of not enough properties to rent for local people.” Holiday homes are particularly prominent in some parts of England and Wales.
Capital Gains Tax cut to affect landlords and buy-to-let market
The Chancellor announced that the higher rate of property Capital Gains Tax will reduce from 28% to 24%. Capital Gains Tax applies to properties when a person makes a profit on selling a property that is not their main home. Examples include when selling buy-to-let properties, business premises, land, and inherited properties.
These tax rules meant that landlords could claim Capital Gains Tax relief, and count profits from the rent for pension purposes.
The Spring Budget also abolished multiple dwellings relief (MDR). MDR is available for people who buy more than one residential property at a time. Originally introduced to minimise any barriers when investing into property, it’s likely this relief will affect larger landlords and the buy-to-let sector the most.
Commitment to build million homes this parliament Jeremy Hunt re-affirmed the Conservative party’s commitment to build one million homes by the end of the Parliament - allocating £242 million to new house building. This includes specific projects in the Canary Wharf area of London, as well as in Blackpool, Sheffield, Liverpool, and Cambridge.
Other announcements that may affect individual landlords and tenants
- Cuts to National Insurance. The contribution rate has been reduced by 2p again - from 10% to 8% of pay. This change is intended to reduce the historically high tax burden, and will benefit employers and employees, including landlords, and tenants alike.
- Fuel duty freeze. Fuel duty will stay at 53p per litre, saving the average car driver - according to the Chancellor - around £50 per year.
- No huge changes for energy bills expected. The Chancellor announced intentions to focus on clean energy, with 25% of homes running on nuclear energy by 2050. However, there wasn’t any specific answer to the numerous calls to assist struggling households with their bills.
This article is intended as a guide only, and does not constitute legal advice. For more information, visit gov.uk.
If you are a landlord, or thinking of becoming a landlord, and would like to speak to one of our team, please contact us on:-
01895 625999
lettings@gibsonhoney.co.uk