Understanding the New Budget: What Property Buyers and Sellers Need to Know

Understanding the New Budget: What Property Buyers and Sellers Need to Know hero

On October 30, 2024, Labour's Chancellor, Rachel Reeves, announced the new UK budget with several updates relevant for buyers and sellers. Here’s a summary of the key changes to help understand how these may affect you in the housing market.

Main Changes in Taxes and Property Ownership

  1. Capital Gains Tax (CGT): If you sell property (other than your main home), you may see changes in the capital gains tax you pay on any profit. This could impact landlords, second-home owners, and investors, who might face higher tax rates on the gains they make from selling property. The aim is to shift some of the tax burden to gains from investments and property, which could influence investors’ choices in the housing market​
  2. Inheritance Tax: Another possible change is in inheritance tax, which applies to wealth passed down after someone’s death. The government may lower the tax-free threshold of £325,000, which would mean that more estates would be taxed if their value is above this limit. This could affect families planning to inherit properties, especially in areas with high home values.
  3. VAT on Private Schools: Although not directly linked to property, a new VAT on private school fees starting in 2025 could shift demand in areas with popular state schools. If more families decide to choose state schools, property prices in these catchment areas might increase due to higher demand.
  4. National Living Wage Increase: The minimum wage will rise to £12.21 per hour from April 2025. This boost to wages may help some people save more for buying a home or afford higher rent, though landlords and employers may also have increased costs to cover.

Other Possible Impacts

These changes are designed to increase tax revenue and redistribute certain benefits. In terms of the housing market, whilst some property investors may be more cautious, the minimum wage increases could support more affordability for buyers in the long term. It remains to be seen how these changes will influence the balance between housing demand and availability across the UK.

If you're considering a property sale or letting after the recent budget changes, contact your local office for advice and guidance.

Devizes: 01380 730200
Didcot: 01235 816222
Lambourn & Hungerford: 01488 73337
Marlborough: 01672 556640
Newbury: 01635 35010
Pewsey: 01672 556640