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Residential property specialist Stamp Duty rise…
Chancellor Rachel Reeves has announced a 2% increase in Stamp Duty Land Tax (SDLT) to 5% on investment properties and second homes. The change takes effect tomorrow, 31 October 2024. In her first Budget speech, she told MPs:
“This will support over 130,000 additional transactions from people buying their first home or moving home over the next five years.”
Yet, Ms Reeves did not elaborate on exactly how this would work.
…but CGT frozen on residential property
However, there was also some relief for investors and second home buyers. The Chancellor announced that Capital Gains Tax (CGT) rates on residential property will remain at 18% and 24%, depending on the individual’s taxable income. A rise was widely expected, and it’s thought that the freeze reflects concerns about the number of private landlords currently exiting the market. Nationally, there is a huge shortage of residential rental property.
Kayleigh Curtis, Head of Residential Property at BLB’s Swindon office, believes the additional 2% in SDLT alone will further reduce demand. “Second home buyers are already responding to last year’s Budget change allowing local authorities to charge them double council tax,” she said. “This alone has resulted in many selling up. Now, with 5% Stamp Duty payable, many considering buying a second home will certainly think twice.”