Rise in Stamp Duty For Landlords

In a significant Budget announcement, Chancellor Rachel Reeves revealed that Stamp Duty on buy-to-let properties and second homes will rise from 2% to 5% starting tomorrow. This change aims to address a £22 billion shortfall in public finances and will have a direct impact on landlords.

Stamp Duty rates are increasing for those buying a second home / additional property in England or Northern Ireland. They’re currently three percentage points higher than standard Stamp Duty rates. But from tomorrow (31st October 2024), Stamp Duty on additional properties will be five percentage points above standard rates.

Full details can be found in the table below.

Additionally, Reeves increased Capital Gains Tax, with the lower rate rising from 10% to 18% and the higher rate from 20% to 24%. Fortunately for residential property owners, the rates for residential assets will remain unchanged at 18% and 24%.

Employers in the property sector will also feel the pinch, as National Insurance contributions will increase from 13.8% to 15%, with the threshold for payments dropping from £9,100 to £5,000.

Reeves extended the freeze on the Inheritance Tax threshold until 2030, maintaining the tax-free amount at £325,000 for estates.

In a notable policy shift, she announced the abolition of ‘non-dom’ status, emphasising that individuals residing in the UK should contribute to its tax system. This change is expected to affect the appeal of wealthy buyers in prime locations like London and the Home Counties.

Overall, the Budget will implement £40 billion in tax increases as part of efforts to close existing loopholes and ensure a fairer tax system.