Spring Budget 24: Overview for landlords

Headlines for property investors:

"A shock budget for property investors with the removal of FHL tax reliefs and Multiple Dwellings Relief. Now more than ever, it’s crucial for owners to consider new strategies for managing their property investments effectively. The impact of tax changes will vary among investors, highlighting the importance of personalised tax planning.”

Nadeem Raziq, Provestor Head of Tax

Spring Budget 2024 Key Points:

Furnished Holidays Let tax regime abolished:

• In the 2024 Spring Budget, the Chancellor announced that the government is abolishing the Furnished Holiday Lettings tax regime to “level the playing field between short-term and long-term lets.”

• From 6 April 2025, short-term and long-term lets will be treated the same for

  tax purposes. Individuals with FHL and non-FHL properties will no longer need to calculate and report income separately.

• Read our blog for an in-depth look at how the Budget tax changes will impact holiday let owners >

Capital Gains Tax higher rate cut

• From 6 April 2024, the higher rate of property Capital Gains Tax will reduce from 28% to 24%.

  Currently, gains from residential property are taxed at 18% for the basic rate and 28% on the remainder.

• This measure will reduce the higher rate of CGT from 28% to 24% and aims to raise revenue and boost the availability of housing by encouraging residential disposals.

Multiple dwellings relief abolished

• From 1 June 2024, the government is abolishing Multiple Dwellings Relief (MDR), a bulk purchase relief in the Stamp Duty Land Tax regime.

• Multiple dwellings relief for stamp duty land tax (SDLT) currently provides a reduction in the SDLT payable on purchases of two or more dwellings in one transaction (or part of a series of linked transactions).

• Property transactions that exchanged on or before 6 March 2024 will still be able to benefit from MDR regardless of completion date, along with any other purchases that are completed by 1 June 2024.

Local Housing Allowance

• Local Housing Allowance rates will rise to the 30th percentile of local market rents from April 2024, benefitting 1.6 million low-income households.

Personal tax

• The government is cutting the main rate of employee National Insurance by 2p from 10% to 8% from 6 April 2024. Combined with the 2p cut announced at Autumn Statement 2023, this will save the average worker on £35,400 over £900 a year.

• The government is also cutting a further 2p from the main rate of self-employed National Insurance on top of the 1p cut announced at Autumn Statement 2023. This means that from 6 April 2024, the main rate of Class 4 NICs for the self-employed will now be reduced from 9% to 6%. Combined with the abolition of the requirement to pay Class 2, this will save an average self-employed person on £28,000 around £650 a year.

Child benefit

• From April 2024, the current threshold at which the High Income Child Benefit charge applies is being changed from £50,000 to £60,000.

• Also changing is the amount at which an individual loses all entitlement. This is increasing to £80,000 from the current £60,000 threshold.

Value Added Tax (VAT)

• From 1 April 2024, the threshold at which businesses are mandated to register for VAT is being increased from £85,000 to £90,000. The deregistration threshold is also being increased from £83,000 to £88,000.

Non-domiciled status

• Non-domiciled status will abolished and will change to a residency-based regime, with a two-year arrangement for those currently classed as non-domiciled to transfer to the new regime.

• From April 2025, new arrivals will not pay any tax on foreign income and gains for their first four years in the UK. If in the UK after four years, then they will be taxed like any other UK taxpayer.