Date
Text
min read

Autumn Statement latest: Chancellor reveals tax rises for landlords

chancellor hunt|iain mckenzie guild||sylvie inhouse

Landlords face higher bills from next year after Chancellor Jeremy Hunt slashed the annual threshold for Capital Gains Tax from �12,300 to �6,000 next year and �3,000 from April 2024.

Although a rise in CGT didn'�t materialise, he followed the Office of Tax Simplification'�s advice to reduce the tax-free allowance by more than half '� a move that property experts then warned could spark a mass exodus of landlords from the market.

In his Autumn statement, the Chancellor also announced that stamp duty cuts announced in the mini-Budget in September would remain, but end on 31st March 2025, creating an incentive to support the housing market by boosting transactions.

Predecessor Kwasi Kwarteng raised the threshold to �250,000 and for first-time buyers, to �425,000 '� cuts panned by mortgage brokers as a catalyst for stimulating an overheated property market.

Income tax

Other announcements include changing the threshold for the top rate of income tax from �150,000 to �125,000 and freezing allowances and thresholds for income tax, national insurance and inheritance tax until April 2028.

For the most vulnerable, Hunt told those on Universal Credit that their benefit would rise in line with September'�s inflation figure of 10.1% from next April, while about four million families in the social rented sector would see rents capped at 7% in 2023/24, meaning an average saving of �200.

Landlords struggling to sort Alternative Payment Arrangements might be heartened to hear that the Treasury will invest �280 million in a DWP crackdown on benefit fraud and error over the next two years.

Energy bills

On the subject of energy bills, while the Chancellor announced a continued price guarantee from April of �3,000 per household and an additional cost of living payment next year of �900 for households on means-tested benefits, he also signalled that he would be getting tougher on carbon reduction '� and possibly EPC targets.

'Energy efficiency is important and I have set our country new national ambition, that by 2030 I want to reduce energy consumption from buildings and industry by 15%, which equals a �28 billion saving,'� he told MPs. 'This is a shared mission with companies and families playing their part.'�

Reaction

ben beadle nrla

Ben Beadle, Chief Executive of the NRLA says: 'The demand for private rented housing is massively outstripping supply. This will only worsen as growing mortgage rates make home ownership more difficult to afford.

'The Government has yet again failed to recognise the potential for housing to drive growth and deliver for the economy. The Chancellor should have focused on boosting supply by ending the Stamp Duty Levy on the purchase of new rental homes.

'Research by Capital Economics suggests that scrapping this could lead to a �10 billion boost to Treasury revenue. This would be as a result of increased income and corporation tax receipts. Instead, these swinging cuts to Capital Gains Tax allowances will dissuade investment for years to come. 

'The last thing renters need is an effective further tax hike on the private rented. All this will do is discourage investment in the new homes to rent the country desperately needs and drive up the cost of renting.'�

sylvie inhouse

Sylvie Harris, Director of Lettings at INHOUS, says: 'For the many landlords who have been planning to dispose of their rental assets due to the raft of legislation and adverse tax changes, the announcement to halve the Capital Gains Tax exemption in 2023 will come as a blow. 

"This news will make it less favourable for landlords to sell and they will likely continue to let their properties until the conditions improve.  However, tenants will benefit as there is already a shortage of rental properties available on the market.'�

Dominic Agace, Chief Executive of Winkworth, says: 'The change to CGT is yet another negative move by successive Chancellors against buy-to-let landlords, many of whom are already leaving the sector due to increased taxation, regulation and rising interest rates.

"This is an own goal by the Government as the private rental sector is the only place many people can find a home if they are not in a position to buy.

"With the lack of social housing supply and the need for young professionals to be highly mobile and able to move to London and other major cities, the role of the private landlord is more important than ever and should be encouraged."

iain mckenzie guild

Iain McKenzie, CEO of The Guild of Property Professionals, says: 'Bringing stability to the economy is the number one priority for the property sector. 

'These sweeping cuts alongside increases in taxation will spark fears of a deep recession on the horizon, but these decisions have been taken to avoid predictions of it lasting for two years - one of the longest in this country'�s history.

'House prices are unlikely to drop dramatically as the unprecedented demand we have seen in recent years has endured. 

'There may be some realignment in pricing to adjust for the rising cost of living, but the market will recover. During the global financial crisis house prices dropped by around 19%, however, it has sustained and grown thereafter.

'Despite the increases in tax and budget cuts announced today, the stamp duty cut will remain in place until 2025, which shows that the government sees the property market as driving growth and stability. 

Tags:

No items found.

Author

Comments