The Chancellor, Jeremy Hunt, gave his Autumn Budget 2022 at lunchtime, intending to deal with inflation and keep mortgage rates down for homeowners.
In this short and sharp post, I wanted to touch on what this would mean
specifically for Neath landlords and homeowners thinking of buying and selling
Capital Gains Tax
Changes
In previous articles about the
Neath property market, I touched on the muted plans from 2020 to increase the
Capital Gains Tax (CGT) headline rate.
Instead, in the Budget, the
CGT relief allowance has been cut from £12,300 to £6,000 for the next tax year
(2023/4) and then cut again to £3,000 for 2024/5.
Therefore, if
you are a basic rate taxpayer, you will end up paying £1,134 extra in CGT after
April 2023 (and £1,764 if a higher rate taxpayer) and a further extra 50% on
top of those figures in tax year 2024/5
Only second homeowners and
landlords pay Capital Gains Tax on the difference between the price you paid
for the property and the price you sold it for. (Note- it is not paid on any
gain of your principal residence)
This will be unwished-for news for Neath landlords and second-home
owners
Even if you have no intentions of selling your portfolio in the next
five to ten years, there are things you could be doing now to reduce your CGT
liability in the future. However, there are various reliefs [name of town]
landlords can apply to HMRC for that will reduce the CGT liability. If you
would like some names of good local Neath accountants, drop us a line, and we
can suggest some for you.
Is it worth selling your Neath rental property now? Well, the average
conveyancing time for UK property from sale agreed to exchange of contracts is
19 weeks, which takes us to 30th March 2022…all to save £1,764 …all
at a time when rents have rocketed by 19% in the last two years.
Stamp duty cut to stay
– yet only until 2025
Kwasi Kwarteng’s cut to stamp duty in England announced in his September
Budget will remain until 31st March 2025.
Jeremy Hunt stated because housing activity will be slower in 2023/4, the
stamp duty cuts announced in Kwarteng’s mini-budget will remain in place for
the next two years and four months.
This means that the price of a property before stamp duty is paid will
stay at £250,000, up from the previous level of £125,000 until March 2025, then
drop down to the old rates.
This will be good news for Neath home buyers and landlords in the coming
years.
