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Spring Budget 2024: Effects on the Property Market

Spring Budget 2024: Effects on the Property Market

March 11th, 2024

The anticipation surrounding the 2024 Spring Budget was palpable. With a general election on the horizon, this was the Conservatives’ last major fiscal event ahead of it. Plenty was expected in terms of housing market announcements, such as an overhaul of the LISA rules and the introduction of a 99% mortgage.  

The outcome however differed from what many expected in terms of housing market announcements, and whilst this has left many disappointed, there were changes to specific tax and stamp duty rules which will likely influence people’s progress on the property ladder.  

This article breaks down those changes and the implications they will have for prospective home movers.  

Capital Gains Tax (CGT) Changes: 

Capital gains tax (CGT) saw a significant cut, dropping from 28% to 24% for higher-rate taxpayers selling residential properties that are not their primary residences.  

This reduction might incentivise more property sales, potentially bolstering housing supply. However, critics argue that it disproportionately favours wealthy property owners, allowing them to retain more profits from sales. 

Stamp Duty Change: 

Before the Budget, people paid less stamp duty if buying multiple residential properties at once, compared to if they bought them individually.   

As of June, purchasers acquiring more than one residential property simultaneously will no longer benefit from reduced stamp duty compared to individual purchases. The rationale behind this decision, according to the Government, is the absence of evidence that such relief incentivised investments in the private rented sector. 

Abolition of Holiday Letting Tax Breaks: 

A final notable change was the abolition of tax breaks for owners of furnished holiday lets, aligning them with buy-to-let properties in terms of taxation.  

While this move may render holiday letting less appealing, it could lead to an influx of properties into the long-term rental market or put more homes up for sale, particularly in tourist hotspots. 

The Spring Budget 2024 left a lot of people disappointed that certain adjustments were not met. A LISA rules adjustment was highly anticipated but instead intiatives such as the British ISA were announced.  Money Saving Expert Martin Lewis explained via X that the LISA overhaul did not occur as the Chancellor wanted to ensure property prices were “definitely rising” before unveiling a “big home ownership package”. He also mentioned that a LISA “reform” is in the chancellor’s sights moving forward.   

While the Budget introduced some adjustments with potential ramifications for the housing market, it fell short of addressing the core issues of affordability and accessibility. As the country navigates towards the general election, the housing crisis remains a pressing concern.  

If you want to speak about your individual circumstances and get the best mortgage offer for you, click here to book a FREE no obligation with us. Our advisors are on hand to help you get the offer you deserve. 

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