In the Autumn Budget 2024, delivered on 30th October, Chancellor Rachel Reeves introduced several notable changes set to impact landlords, property owners, and investors across the UK. This year, the Labour government leans heavily on affordability and tax fairness, meaning landlords will need to prepare for updates that could affect their current and future property portfolios.
In this blog, the Landlord Insurance team here at Lansdown breaks down what’s changing, and how it could impact you and your property investments.
Stamp Duty Surcharge Increases
As of 31st October 2024, landlords purchasing additional properties (such as second homes or buy-to-lets) will see a jump in Stamp Duty Land Tax (SDLT) rates on these investments. The surcharge has risen from 3% to 5%, adding a substantial cost to any new property acquisition.
This measure aims to reduce competition between investors and first-time buyers. Landlords should consider how this might affect their return on investment, particularly for those considering expanding their portfolios in areas where house prices are already high.
Capital Gains Tax
The Capital Gains Tax (CGT) rate on residential properties remains unchanged. CGT is applied to the profit from selling certain assets, including property, meaning landlords who sell a rental property for a gain are subject to this tax. With the lower CGT rate rising from 10% to 18% and the higher rate from 20% to 24%.
Employers’ National Insurance Contributions
Starting 6th April 2025, the per-employee threshold for employer National Insurance Contributions (NICs) will decrease from £9,100 to £5,000 per year. With this change, and a 1.2% increase in the rate to 15%, landlords who employ property management or maintenance staff may face higher costs, potentially impacting their overall profitability.
Inheritance Tax – New Rules for Property Transfers
Property owners often consider their investments part of their legacy. However, the new Inheritance Tax (IHT) guidelines bring a shift in this landscape. The IHT threshold will stay the same until 2030. For estates valued under £325,000, there’s no IHT, while estates including a property passed to direct descendants have a £500,000 exemption. Additionally, pensions transferred after April 2027 will be subject to IHT.
Fuel Duty
The 5p cut to Fuel Duty will be extended into next year, as Reeves stated that raising it would be the “wrong choice.” While the fuel duty cut itself might not have a direct impact on the rental market, many landlords and letting agents rely on transportation for property viewings, inspections, and management tasks. Keeping the fuel duty cut could help lower overall operating costs.
Final Thoughts
The Autumn Budget introduces a mixed impact for the property sector. For letting agents and landlords, navigating the new Stamp Duty and NI contributions will be essential. Adjustments in taxes and allowances may shift property strategies and influence how landlords view long-term property investment under the current government.
This article is for informational purposes only and should not be considered legal advice.
About Lansdown Insurance Brokers
Lansdown Insurance Brokers are specialists in Landlord Insurance and Block of Flats Insurance. We can provide flexible policies to suit individual client needs. Whether you’re a landlord, letting agent, or property owner call the team on 01242 524498 or email enquiries@lansdowninsurance.com.
Lansdown is part of the Benefact Group, a charity-owned, international family of financial services companies that gives all available profits to charity and good causes.