The UK Budget 2024, presented by Labour’s Rachel Reeves, introduced several key economic and fiscal changes with implications for various sectors, including property, taxation, energy, and housing. Here’s a summary with a focus on property-related measures:
Property and Housing
- Stamp Duty Land Tax (SDLT):
- First-time buyers remain exempt from SDLT on property values up to £300,000 (for homes priced up to £500,000).
- A 5% surcharge on additional properties was introduced starting October 31, 2024, replacing the previous 3% rate
- Capital Gains Tax (CGT):
- No change for residential property CGT rates, which remain at 18% (basic rate) and 24% (higher rate). However, for non-residential assets, rates increased from 10% to 18% (basic) and 20% to 24% (higher)
- Affordable Housing:
- Labour pledged to build 1.5 million homes during this Parliament.
- A £500 million boost was allocated to the Affordable Homes Programme to build 5,000 additional homes.
- £3 billion in housing guarantees for small and medium enterprises (SMEs) and the Build-to-Rent sector
- Cladding Remediation:
- More than £1 billion has been allocated for cladding removal in social and private housing to address safety concerns
- Other Property-Related Taxes:
- Council tax reforms are being discussed, particularly for higher-end homes, to ensure fairness in property taxation
Other Budget Highlights
- Inheritance Tax (IHT):
- Thresholds frozen until 2030. Inherited pensions will be taxed starting in 2027, aimed at raising £2 billion annually
- Energy and Environment:
- The Energy Profits Levy on oil and gas firms increased to 38% and extended until 2030
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- Investments in green infrastructure, including a focus on energy efficiency and sustainability, were highlighted.
- General Economic Measures:
- GDP growth projections include 1.1% in 2024 and 2% in 2025, while inflation is set to average 2.5% in 2024
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- Labour plans to eliminate the non-dom tax regime and replace it with a residence-based system
- Social Spending and Labour Market Initiatives:
- £240 million allocated for job market reentry projects targeting the economically inactive.
- Investments in public services, including an increase in the core school budget by £2.3 billion
This budget reflects Labour’s focus on tackling housing shortages, reforming property taxes, and boosting affordability, while addressing fiscal challenges and supporting economic growth.
