Winners
Landlords needing to sell a buy-to-let
In a surprise move, the Chancellor decided to reduce the higher rate of Capital Gains Tax charged on the profit earned when selling an additional residential property. The current rate of 28% will decrease to 24% on 6th April 2024, making the disposal of buy-to-let assets cheaper for those whose investment has made them money.
The announcement is seen as another indication that the Conservative Government would like to edge out private landlords in favour of corporate Built to Rent operations. The new 24% tax rate is a carrot being dangled in front of landlords who have been weighing up their future in private lettings. A cheaper tax bill may be the push they need to sell property fast, especially if they had been previously deterred by the costs and would like to cash in while property values are holding firm.
Budget-minded landlords can sell a buy-to-let to LandlordBuyer and save even more money, as there is no estate agent involved and therefore no agent fees to pay. LandlordBuyer is a professional buy-to-let purchaser and landlords deal directly with us. We also cover a landlord’s legal fees and will pay for an EPC, if required, to reduce financial outlay even further.
Losers
Holiday let owners
If holiday let owners felt they were being singled out before the Budget, with some local councils applying 100%, 200% or even 300% council tax rates on holiday lets and a number of housebuilders restricting new builds sales to local owner occupiers – they will feel increasingly marginalised now.
The Chancellor has decided that the furnished holiday lettings (FHL) regime isn’t part of his future plans and this will end in April 2025. The tax break currently applies to owners of furnished holiday cottages, Airbnbs and other accommodation set up for vacations.
Holiday let owners who make their property available for letting for at least 210 days a year, and take bookings for at least 105 days in that 12 month period, currently enjoy special tax status - thought to apply to approximately 127,000 properties. Now they only have a year to claim full mortgage interest relief, enjoy capital allowances for furniture and pay a lower rate of Capital Gains Tax. After April 2025, all holiday lets will be subject to the same taxation as long-term rentals and the concern will be treated as an investment, not a business.
This leaves many holiday let owners in limbo – they will need to reprice their holiday lets to plug a financial gap, offer their property to the long-term rental market or sell up.
Portfolio landlords
There has been a brilliant synergy between developers and landlords when it comes to buying in bulk. It has been common for portfolio landlords to buy multiple properties in a single or linked transaction – often a small development or a house conversion – to benefit from a particular stamp duty perk but this is being scrapped.
Multiple Dwellings Relief (MDR) currently applies to those buying more than one leasehold or freehold property at the same time. The Chancellor, however, has announced this measure will end on 1st June 2024.
It’s worth noting that those buying six dwellings or more in a single or linked transaction can still have the purchase assessed using the non-residential property rates.
Whether you fall into the winners or the losers category, the 2024 Spring Budget makes it tempting for landlords and property investors to exit the private rental market. If the Chancellor’s changes have convinced you now is the right time to leave, contact LandlordBuyer. We will buy your properties for cash – sell with sitting tenants or with vacant possession. Alternatively, start your exit by requesting a free online valuation.