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Three tax rules UK landlords should be aware of in 2024

by | May 29, 2024 | Clients

Any changes to property taxes and regulations are important for UK buy-to-let landlords to be aware of. Here is a breakdown of some key tax rules and regulations landlords should be aware of this year:

  • Changes to Capital Gains Tax (CGT): When landlords sell a property, they have to pay CGT. In recent years the tax-free allowance has come down considerably and this year, has shrunk again. In April 2023, the capital gains tax (CGT) allowance was reduced from £12,300 to £6,000. Since 6 April 2024, it has been halved again from £6,000 to £3,000. This means that when you sell a property, your tax bill will now be higher. However, there is one silver lining for higher rate taxpayers – since 6 April 2024, the CGT tax rate for higher and additional rate taxpayers selling a residential property has dropped from 28% to 24%. That being said, the smaller allowance means that the benefits from the tax rate cut will be offset by the shrinking allowance and in general, from now on, landlords will pay more in tax when they sell a property.
  • Furnished holiday let tax to disappear next year: In the 2024 Spring Budget, it was announced that on 6 April 2025, the furnished holiday lets tax system will no longer exist. According to the Chancellor, the aim is to even things out between holiday homeowners and long-term landlords. So those landlords who let a holiday home will soon no longer benefit from things like being able to offset holiday let mortgage interest against annual profits or claiming for ‘capital allowances’, such as furniture. Also impacting those who want to rent out a holiday let, from summer 2024, they will need planning permission to do so and a mandatory registration scheme will be introduced.
  • One more year to benefit from Stamp Duty cut. Since September 2022, UK landlords have benefited from a stamp duty cut. The threshold for property buyers increased from £125,000 to £250,000. Before the cut, landlords and property investors paid a stamp duty rate of 3% on properties bought for £125,000 or less and 5% on properties between £125,001 and £250,000. Right now, thanks to the Stamp Duty cut, they pay a flat rate of 3% on all purchases up to £250,000. However, from 1 April 2025, these rates will go back to normal, meaning that landlords who buy cheaper properties will no longer benefit from this discount. The government’s stamp duty calculator will help you work out how much tax you’d need to pay when buying a rental property.

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