Chancellor Rachel Reeves has announced a slew of property tax measures in her first Budget.
The stamp duty surcharge on additional homes – buy to lets and holiday properties – will increase by 2% to 5%.
Capital Gains Tax for non-residential assets will rise at its lowest rate from 10% to 18% and the higher rate from 20% to 24%. But there will be NO change to Capital Gains Tax for residential property – which already has 18% and 24% rates.
The Conservative government’s Inheritance Tax threshold, frozen until 2028 by Rishi Sunak, will be extended to 2030. It will remain the case that the first £325,000 of any estate can be inherited tax-free.
The bad news directly applying to lettings and estate agents is that employers’ National Insurance contributions will go up from 13.8% to 15% next April. And the threshold at which employers start paying drops from £9,100 to £5,000.
These are part of what Reeves admitted to MPs would be a Budget with tax rises and spending cuts to the total of £40 billion.
Rest of the Budget At A Glance
Personal taxes
- Freeze on income tax and National Insurance thresholds to end in 2028, preventing people from being dragged into higher tax bands as their wages rise
- Capital gains tax paid on profits from selling shares to increase from up to 20% to up to 24% – rates on additional property sales to stay same
- Freeze on inheritance tax thresholds extended beyond 2028 to 2030
Business Taxes
- Firms to pay National Insurance on workers’ earnings above £5,000 from April, down from £9,100 currently, with the rate increasing from 13.8% to 15%
- Employment allowance – which allows companies to reduce their NI liability – to increase from £5,000 to £10,500
- Tax paid by private equity managers on share of profits from successful deals to rise from up to 28% to up to 32% from April
- Main rate of corporation tax, paid by businesses on taxable profits over £250,000, to stay at 25% until next election
Transport, alcohol, tobacco
- £2 cap on single bus fares in England to rise to £3 in January
- 5p cut to fuel duty on petrol and diesel, due to end in April 2025, kept for another year
- Air Passenger Duty on flights by private jet to go up by 50%
- Tax on tobacco to increase by 2% above inflation, and 10% above inflation for hand-rolling tobacco
- Tax on non-draught alcoholic drinks to increase by the higher RPI measure of inflation, but tax on draught drinks cut by 1.7%
Housing
- Current affordable homes budget, which runs until 2026, boosted by £500m
- Social housing providers to be allowed to increase rents above inflation under a multi-year deal;
- Stamp duty surcharge, paid on second home purchases in England and Northern Ireland, to go up from 3% to 5%
Wages, benefits and pensions
- Legal minimum wage for over-21s to rise to £12.21 from April
- Rate for 18 to 20-year-olds to go up from £8.60 to £10, as part of a long-term plan to move towards a “single adult rate”
- Eligibility widened for the allowance paid to full-time carers, by increasing the maximum earnings threshold from £151 to £195 a week