How do budget changes affect buyers and sellers?

If you are involved in buying or selling property, as a residential or a commercial owner, you need to be aware of the impact of the recent budget. 

Changes to Capital Gains Tax (CGT)

There is some good news if you are a landlord. The government announced that they will not be changing the current CGT rate for residential properties, despite previous rumblings to the contrary.

Stamp Duty Land Tax (SDLT) on second homes

Not so good news if you are considering or in the process of purchasing a second home. The government announced that they are increasing the second home surcharge from 3% to 5%, effective from 31st October 2024.

It has been confirmed that any transactions which exchanged prior to 31st October 2024 will still only be liable for the 3%. 

This news has already caused backlash for those selling to second home buyers, resulting in an influx of sale price re-negotiations and an increase in sale fall throughs.

The current SDLT threshold of £250,000 is due to revert to £125,000 in March 2025. The absence of any mention of this in the budget signifies that this is unlikely to be extended. The same applies for First Time Buyers Relief which will revert back to £300,000 (from £425,000) from this date.

Will there be changes to interest rates?

The Government’s budget could also have an overall effect on home buyers requiring mortgage finance as forecasts by the OBR on economic growth suggest that this could slow down the fall of mortgage interest rates. Only time will tell on this one.

Looking forward

The increasing tax burden on people, the reduction of the stamp duty threshold and the potential uncertainty of interest rates could result in an unstable market into the summer of 2025. But whatever the housing ‘weather’ brings the team at Samuels will help you with all your properties needs and are specialist conveyancing solicitors in Devon, so please call us on 01271 343457.