The Autumn 2024 budget introduces several significant measures aimed at addressing the housing market, economic stability, and sustainability. Designed to tackle pressing issues like housing affordability and cost-of-living pressures, the budget lays out policies that will affect homeowners, renters, and property investors alike. For landlords specifically, the budget brings a mix of new tax implications, incentives, and regulatory considerations.
Here’s a brief look at some key points in the budget and how they might impact landlords:
Interest Rate Changes and Mortgage Relief
Recognising the pressure on mortgage holders, the Chancellor has hinted at potential relief measures for landlords who are managing mortgages on rental properties. This could come in the form of adjustments in tax relief for interest payments, which might provide some breathing room on financing costs.
Tax Incentives for Sustainable Upgrades
To support the government’s environmental goals, landlords could benefit from new tax breaks for eco-friendly property improvements. Upgrades like energy-efficient windows, solar panels, and improved insulation could qualify for tax deductions, which may also add long-term value to the property.
Rental Income Tax Adjustments
Modifications to the rental income tax structure are on the agenda, which could impact tax obligations depending on property portfolio size and rental income level. Some landlords may benefit from tax relief aimed at smaller rental incomes, while higher income brackets may face increased taxes.
Rent Control and Tenant Protections
To address rental affordability, the budget proposes potential rent caps and stronger tenant protections. While this is intended to aid renters, landlords may need to adapt to new limits on rental increases, which could impact profitability in certain regions.
Housing Supply and Property Value Initiatives
The budget allocates funding to boost the housing supply, particularly affordable housing. While this may increase competition in the rental market, it could also present investment opportunities as the government seeks to incentivise private sector involvement in new housing projects.
Further to these adjustments and measures that may impact Landlords looking to retain their existing rental properties, there are also implications for Landlords looking to sell or purchase rental property:
Capital Gains Tax (CGT)
If you’re thinking about selling a rental property, there are some updates to CGT that could affect your net profits. The budget lowers the CGT exemption threshold, so more of your property sale proceeds may now be taxed. Additionally, there’s a potential rise in CGT rates for higher-rate taxpayers, making it more costly to sell investment properties. This might encourage some landlords to hold onto properties longer, but it’s good to be aware of these changes if you’re planning to sell soon.
Stamp Duty Adjustments
For those considering purchasing additional properties, there may be higher Stamp Duty surcharges on buy-to-let and second homes. However, the budget introduces reductions for first-time buyers and possibly for properties that meet eco-friendly standards. This means buying additional properties might be a bit pricier upfront, though the eco-friendly incentives could help offset costs if you’re looking to make sustainable investments.
Conclusion
To conclude, the 2024 budget reflects the government’s intent to balance tenant support and housing market stability with incentives for responsible property management. Landlords should review these measures carefully and may wish to consult a financial adviser to fully assess how the changes could affect their property portfolio and investments.
