Autumn Budget for 2024: What it means for holiday home owners
In the newsWe have put together a summary of the Autumn Budget 2024 announced by the Chancellor last week and what it means for existing holiday home owners as well as those looking to make an investment.
Following the recent Autumn Budget 2024 announcement, changes have been made to the furnished holiday let regime (FHL) alongside other changes for 2025. Here we give a summary of some key updates:
Housing sector
The current Stamp Duty rate on the purchase of an additional residential property in England will increase from 3 to 5 percent. This is for property purchases on or after the 31 October 2024. This also applies to the purchase of a residential property by a company that is not liable for the single rate of SDLT (stamp duty land tax).
The single rate of SDLT that applies to the purchase of a residential property for more than £500,000 by a company in England and purchases that are not intended to be used for commercial purposes will increase from 15 to 17 percent.
House buyers will now need to pay stamp duty on their main home at £125,000 in April 2025, reduced from £250,000.
The threshold for first-time buyers to pay stamp duty will also drop £300,000 from £425,000.
Furnished Holiday Letting (FHL) reform
The abolition of tax benefits for Furnished Holiday Lets was announced in the Spring Budget 2024. The Chancellor has confirmed her government will remove tax advantages from April 2025.
Further information about the abolition of FHL tax benefits can be found here.
Capital gains tax
Although the main rates of CGT were raised to 18% and 24% respectively, this only had the effect of bringing rates in to line with those affecting residential property sales – meaning that, for now, there is no additional tax to pay on sales of second properties.
Inheritance tax
Whilst it was anticipated that there would be fundamental changes to inheritance tax (IHT), there have been no amendments to lifetime gifts, IHT taper rates or capital gains tax on inherited property. There are however exemptions when inheriting farmland from 2026.
