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A handful of changes to property taxation were announced in today's Spring Budget, including a cut to capital gains tax rates.
Rumoured changes for prospective first-time buyers and downsizers failed to materialise, though plans to fund thousands of new homes in London were announced.
Here, we take a look at the key property announcements from today's Budget.
From 6 April, the higher rate of capital gains tax (CGT) on residential property sales will be cut from 28% to 24%.
CGT is payable on profits you make when selling a buy-to-let or second home. The sale of your primary residence isn't subject to the tax.
Basic-rate taxpayers currently pay 18% on their gains, while higher and additional-rate taxpayers pay 28% (soon to be reduced to 24%).
Everyone has an annual CGT-free allowance of £6,000 (£3,000 from April 2024), and can offset costs incurred in selling the property, such as estate agent fees.
The government says this change will 'encourage landlords and second home-owners to sell properties, making more available for buyers'.
Despite a flurry of rumours, no significant changes were made to stamp duty land tax for first-time buyers or people downsizing.
However, the government has moved to abolish multiple-dwellings relief from June 2024. This relief applies when someone buys more than one property in the same transaction, for example several flats in a block.
Currently, buyers can pay stamp duty based on the average price of the individual properties they purchase, rather than the total cost of the transaction – thereby reducing their tax bill.
For example, if you buy five flats in one transaction for £1m, your stamp duty bill would currently be based on five £200,000 transactions. But from June, it will be based on the total cost of £1m – resulting in a much higher bill.
From April 2025, the furnished holiday lettings tax regime will be abolished.
The regime allows people letting out furnished holiday properties to offset mortgage interest, claim CGT reliefs and deduct the cost of furniture when calculating their tax bill.
The government says removing this tax advantage will encourage more landlords to let properties to longer-term tenants.
The Budget also included details of new and ongoing housebuilding projects.
The government says it is on track to deliver 1 million homes within this parliament, with 234,000 properties built in 2022-23.
It announced new plans to fund thousands of new homes in London, at Barking Riverside and Canary Wharf.
Longer-term development plans for Leeds and Cambridge were also outlined.
Today's speech focused on property taxation, but there was no 'big bang' announcement that might spark a sedate housing market into life.
Despite talk that 99% mortgages for first-time buyers might be forthcoming, no mortgage-related announcements were included in the Budget. In fact, the word 'mortgage' didn't feature at all in the 98-page red book.
There was also no mention of new schemes or initiatives to help first-time buyers get on the housing ladder, or changes to lifetime Isa price limits or withdrawal penalties.
With no sign of significant changes, buyers and sellers will need to continue keeping a close eye on what's happening to inflation and the Bank of England base rate.
Find out more: Spring Budget 2024 key announcements
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