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A view on the property-related changes to expect in the upcoming Budget

24/10/2024

Insights

Senior Director at Eddisons and the firm’s head of Public Sector, Javid Patel and his team have delivered over £2bn of regeneration and public sector capital projects across the UK. Ahead of this month’s Autumn Budget, Javid outlines some of the Chancellor’s expected property-related fundraising measures.

“Boxed in by fiscal rules on one side and election pledges that rule out increasing taxes on working people on the other, the Chancellor’s range of options for raising money at the Budget are narrow to say the least.

“While anticipated changes to the fiscal rules could increase the Government’s fiscal headroom by as much as £60bn, creating more scope for public investment that could include funding programmes for much-needed housing provision, such as the Homes England-administered Housing Infrastructure Fund, here are some of the likely-looking candidates for tax hikes relating to property.

“According to property portal Rightmove, despite softer price rises this month, homebuyer demand remains buoyant. The continued strength of the market could give the Chancellor the opportunity to increase capital gains tax, aligning it with the rate of with income tax as Nigel Lawson did back in 1988 - and raising several billion pounds a year.

“And while speculation is growing that the lower stamp duty threshold for first-time buyers, set up two years ago will be scrapped in the Budget, we’re expecting Rachel Reeves to reinstate the value up to which first-time buyers are exempt from stamp duty at £300,000, rather than the current figure of £425,000 which is due to end next year.

“People who live alone, many of whom are pensioners, currently get a 25% discount on their council tax bills. The Government has so far not ruled out changes to the single-person council tax discount, which costs the country around £3bn a year. Local authorities continue to face a funding black hole and the scramble to avoid council bankruptcies means the Government is likely to allow a further increase in council tax bills to pay for escalating social care and other costs.”

Read Javid Patel’s insights on Labour’s long-term housing initiatives and industrial strategy here.

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