Property investors are relieved that Capital Gains Tax rates on residential property have remained at 18% and 24% for standard and higher rate taxpayers.
Instead, the government upped CGT for most assets from 10% to 18% at the lower rate, and from 20% to 24% at the higher rate.
Kevin Shaw, national sales managing director at property services company Leaders Romans Group, said: “Despite an expected increase in capital gains tax (CGT) on the sale of second homes, the chancellor announced there would be no increase in today’s budget.
“This will be well received within the industry, as there has been a lot of pressure on landlords.”
Similarly, Simon Chadowitz, partner at law firm Fladgate, said: “The Chancellor’s changes to the Capital Gains Tax regime were less far-reaching than expected.
“There will be significant relief among investors and property vendors who could not complete live deals before today.”
5% stamp duty surcharge
However, it wasn’t all good news for investors, as government also opted to up the stamp duty surcharge from 3 to 5%.
Mark Michaelides, chief commercial officer of mortgage lender Molo, said: “It looks like a mixed budget for the buy-to-let sector, as expected.
“While capital gains on residential property remains unchanged, clearly the 2% increase in stamp duty on second homes, starting from tomorrow, is punitive to landlords.”
Non-dom status to be abolished
Meanwhile Labour is hitting the high net worth by changing non-dom rules, effectively making it so people who live in the UK pay have to pay UK taxes on all the money they earn, whether it comes from the UK or overseas.
Non-dom status will be abolished from April 2025, though those who already have the status will benefit from a three year transition period.
Chadowitz added: “Given their reliance on discretionary spending from wealthy global customers, the hospitality and luxury retail industries may be at the sharp end of these changes.”
