Today, 6th March 2024, The Chancellor of the Exchequer, Jeremy Hunt, announced the Spring Budget.
Our Landlords Insurance team at Lansdown Insurance Brokers have taken a deep dive into the significant changes impacting the property market and property professionals.
We’ve summarised the key findings from the Spring Budget that landlords need to know.
Tax Cuts and Changes to Multiple Dwellings
The Chancellor has made the decision to abolish the furnished holiday lettings (holiday home) tax regime According to The Telegraph, this move could result in holiday landlords losing an average of £2,835 a year.
Additionally, the reduction in the higher rate of property Capital Gains Tax (Capital Gains Tax is a tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value) from 28% to 24% is expected to generate more transactions in the property market according to Simon Jack, Business Editor at the BBC.
The Spring Budget also saw the abolition of multiple dwellings relief (MDR), likely impacting larger landlords and the buy-to-let sector.
Commitment to Build One Million Homes:
Chancellor Hunt allocated £242 million to new home-building projects, aiming to construct one million homes by the end of the Parliament. This includes specific projects in various regions including the Canary Wharf area of London, Blackpool, Sheffield, Liverpool, and Cambridge.
VAT Threshold Increase and Other Announcements:
Small agencies are set to potentially benefit from the increase in the VAT registration threshold from £85,000 to £90,000, providing relief to smaller business owners. Other announcements in the Spring Budget include cuts to National Insurance contributions, a fuel duty freeze, and a focus on clean energy without specific measures to address energy bill concerns.
The Household Support Fund (HSF) will continue to receive funding for another six months. This program, initiated in 2021, assists families with low incomes by providing support through food banks, warm spaces, and food vouchers distributed by local councils.
Impact on Property Professionals:
These changes, including the reduction in National Insurance contributions from 10% to 8% and the freeze on fuel duty at 53p per litre, will impact property professionals such as landlords, letting agents, and tenants. The freeze on fuel duty is especially advantageous for letting agents who depend on driving for property viewings, potentially saving the average car driver £50 annually, as stated by the Chancellor.
In conclusion, the Spring Budget outlines significant changes impacting the property market, from tax cuts for landlords to commitments to increase housing supply. These measures aim to encourage economic growth while addressing key challenges within the housing sector. However, stakeholders need to stay informed and adapt to the evolving landscape of property legislation and taxation.
About Lansdown Insurance Brokers
Lansdown Insurance Brokers are specialists in Landlords Insurance, Block of Flats Insurance and Home Insurance. We can provide flexible policies to suit individual client needs and provide advice on what cover is needed. For more information call the team on 01242 524498.
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