The 2024 Spring Budget – Main UK Property Related Changes

The following measures were announced by the Chancellor in the Spring Budget on 6 March 2024.

  1. Reduction in the Rate of CGT on Residential Property

The higher rate of tax on the disposal of UK residential property will be reduced from 28% to 24% with effect from 6 April 2024.  Individuals, trustees and personal representatives are liable to pay CGT on residential property gains but private residence relief (PRR) continues to apply on disposals of main residences. The rate reduction is intended to incentivise the market.  The lower rate will remain unchanged at 18%.

  1. SDLT – Mixed Property Purchases

Following the consultation on the existing rules to Mixed Property Relief which commenced in November 2021, it was announced there would be no changes.  Broadly speaking, these relate to transactions which involve both residential and non-residential property and generally results in lower rates being applied at the non-residential rate (thereby avoiding the 3% surcharge for additional residential properties and/or the 2% surcharge applicable for purchases by non-residents).  This continues to generate tribunal cases as the rules are strictly applied by HMRC.

  1. SDLT – Multiple Dwellings Relief (MDR)

Now deemed as not cost effective, MDR will be abolished from 1 June 2024 for transactions which complete or are substantially performed on or after 1 June 2024.  MDR will, however, continue to be available beyond 1 June 2024 where contracts were exchanged before 6 March 2024 provided the contract is not varied after that date.

Originally introduced in 2011, this much used relief reduces the amount of SDLT payable where a purchaser acquires more than one dwelling in a single transaction and other requirements are met.

There were no changes announced to the SDLT thresholds.

  1. Furnished Holiday Lettings (FHL) Regime

Property which currently qualifies under this regime has enjoyed significant benefits which are not available with respect to other residential property letting businesses.  It is intended this regime will be abolished from 6 April 2025.

  1. Agricultural Property Relief (APR)

A measure will be introduced  to restrict the geographical scope of APR and Woodlands Relief to property situated in the United Kingdom. To ensure the compatibility with EU law, the scope of both Reliefs had formerly been extended to property in the European Economic area (EEA). Following Brexit this is now reversed and APR no longer applies to property in the EEA; property in the Channel Islands and the Isle of Man has also been excluded. The measure takes effect from 6 April 2024.

From 6 April 2025 APR is extended to land managed under an environmental agreement with, or on behalf of the government, devolved administration public bodies, local authorities or approved by a responsible body.  This allows for some diversification of use for landowners of agricultural property.

  1. ATED

 The ATED annual charge rises by 6.7% from 1 April 2024 in line with the CPI.  For ATED filing and payment purposes in 2024/2025, a property revaluation as at 1 April 2022 is required (or the date of acquisition for a property acquired after that date).

Property value Charge for tax year 2024/2025 Charge for tax year 2023/2024
More than £500,000 but not more than £1 million £4,400 £4,150
More than £1 million but not more than £2 million £9,000 £8,450
More than £2 million but not more than £5 million £30,550 £28,650
More than £5 million but not more than £10 million £71,500 £67,050
More than £10 million but not more than £20 million £143,550 £134,550
More than £20 million £287,500 £269,450

If you have any concerns or queries relating to the Budget announcements or any other property matter, please contact a member of our Real Estate or Property Litigation teams. 

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