Autumn Budget 2024: latest predictions for landlords

Chancellor Rachel Reeves will deliver the first Labour Budget in 14 years on 30 October 2024. She’s expected to  announce a range of measures designed to plug a £22 billion hole in public finances.

Prime Minister Sir Keir Starmer said the Budget could be ‘painful’ and it’s likely there will be changes that directly affect landlords, with increases to capital gains tax and inheritance tax widely rumoured. 

Read on to find out more about what could be announced and how the rental market could be affected.

• Capital gains tax
• Inheritance tax
• Stamp duty
• Energy efficiency requirements

Higher capital gains tax rates for landlords?

As part of its election manifesto, the Labour Party pledged not to hike income tax, National Insurance, or VAT. And so with a deficit to reduce, it’s expected that capital gains tax (CGT) could be increased as part of the upcoming Budget.

CGT is paid by landlords on the profit they make when selling a property. It’s currently charged at: 

• 18 per cent for basic rate taxpayers
• 24 per cent for higher and additional rate taxpayers

It’s been rumoured that the chancellor may increase gains on all residential property to 30 per cent. Alternatively, it’s been suggested that the government is considering increasing CGT rates in line with income tax rates.

This would mean that: 

• basic rate taxpayers would pay two per cent more in CGT (increasing from 18 per cent to 20 per cent)
• higher rate taxpayers would pay 16 per cent more in CGT (increasing from 24 per cent to 40 per cent)
• additional rate taxpayers would pay 21 per cent more in CGT (increasing from 24 per cent to 45 per cent)

When could capital gains tax changes take place?

As well as how much CGT rates could increase by, the other major question is when they’ll be introduced.

If they’re introduced immediately, any landlords selling a property will be hit with a significantly higher tax bill.

The other option is for them to be introduced from April 2025 (the start of the new tax year). If this happens, there could be a rush of landlords selling properties before next spring to avoid a higher tax bill.

Changes to inheritance tax on the way?

Another rumoured tax increase that could affect many landlords is a higher rate of inheritance tax. 

At the moment, inheritance tax is due at 40 per cent on properties worth more than £325,000. 

Changes in the Budget could see the tax rate increased above 40 per cent or the £325,000 threshold reduced.

There’s also been speculation that the government could increase an additional capital gains tax on top of inheritance tax. 

Due to a range of tax-free and gifting allowances, just four per cent of estates are liable for inheritance tax, according to HMRC. Any changes made as part of the Budget could be designed to increase this proportion.

What next for stamp duty?

Stamp duty is another property tax that could be changed as part of the Autumn Budget.

Currently, landlords and property investors pay a three per cent stamp duty surcharge when they buy a property. 

Although there have been few rumours that the government is planning to reform stamp duty, several housing industry organisations have called for change.

The National Residential Landlords Association (NRLA) wants Rachel Reeves to scrap the stamp duty surcharge paid by landlords. 

Although it could cost the Treasury a significant amount in tax receipts, it says removing barriers to property investment would stimulate housing market activity. This could lead to an estimated £2.5 billion being released back into the economy each year.

Meanwhile, the HomeOwners Alliance has called on the chancellor to scrap stamp duty altogether. It says that the tax is a ‘major obstacle to the housing market functioning properly’.

New energy efficiency grants for landlords?

Not long after being elected, the government announced its intention to bring back changes to energy efficiency rules for rental properties. 

The minimum Energy Performance Certificate (EPC) rating for rental properties will be increased to C by 2030 as part of the Warm Homes Plan.

It was recently announced that tenants (with the agreement of their landlord) will be able to get funding for energy performance upgrades and cleaner heating through the Warm Homes: Local Grant.

Many landlords see increasing energy efficiency in their property as a major challenge that could cost them a significant amount of money. 

As part of the Autumn Budget, the government could announce details of its consultation for increasing the minimum EPC rating, as well as details of funding options for landlords.

What are your predictions for the Autumn Budget? Let us know in the comments below.

More guides for landlords

• What is buy-to-let property investment?
• UK house price predictions for next 5 years
• How to get a buy-to-let mortgage: a simple guide
• Renting with pets – a guide for landlords

Photograph: I-Wei Huang/stock.adobe.com