The Autumn Budget and its Impact on Property Rental
There’s been a lot of talk about what Rachel Reeves was planning to announce in the budget. Some measures had already been briefed, of course, but now the speech is done, economists are busy crunching numbers, and the press is finalising its opinion pieces.
While the budget affects us all, our focus has been on those changes most relevant to our sector. Here’s a quick summary of those points.
In general terms, the cost of employing staff will increase. The minimum wage rise, from April 2025, had already been revealed (£12.21 from April 2025). Hourly pay for apprentices will increase from £6.40 to £7.55. There are also plans to move to a single adult rate.
Employers NIC increases to a rate of 15%, and it’s paid from a much lower threshold of £5,000. Meanwhile, an increased Employment Allowance might mean some small businesses don’t have to pay any Employers’ contributions.
Many in the sector had been concerned about capital gains tax. The lower rate is moving up from 10% to 18% and the higher rate moves from 20% to 24%. For residential property, the rates remain unchanged at 18% and 24%.
Thresholds on inheritance tax are not changing.
The existing 75% business rate discount is not, as many hoped being extended, but a reduced discount of 40% will be in place from April 2025.
The rate for additional stamp duty on second homes is to increase from 2% to 5% from October 31st.
The supply of affordable housing was discussed with pledges to support investment in its provision. In addition, Right to Buy discounts are to be reduced and provisions put in place to ensure local authorities invest receipts to maintain or grow their housing stock.
As always, there’s plenty in the full speech to digest.
