5 property takeaways – Autumn Budget

5 property takeaways from the Autumn Budget – It was the first Labour Budget in 14 years and the new Chancellor was looking to fill a reported £40 billion financial black hole. With property a heavily taxed industry – whether you’re buying, selling, investing or, sadly, dying – the sector held its breath while the announcement was delivered.

1. Stamp duty for additional property purchases changed overnight: the Chancellor wasted no time in penalising those buying property that is in addition to their primary residence. Extra money will be raised thanks to Higher Rates for Additional Dwellings (HRAD) increasing from 3% to 5%. This took effect on 31st October 2024.  To illustrate, a purchaser buying an additional home at a value of £240,000 before the Autumn Budget would have paid £7,200 in additional property stamp duty. Now, the same property purchase would incur a bill of £12,000. From 1st April 2025, another set of revisions to additional stamp duty thresholds are due to take effect, which will make the purchase of additional properties more expensive again. The move led to speculation that a number of buy-to-let purchases that had not reached completion by 30th October would be abandoned due the investor being unwilling or unable to pay the increased stamp duty bill.

2. Capital gains tax on residential property sales stayed the same: speculation was rife that the Chancellor would use the Autumn Budget to tinker with capital gains tax thresholds to boost Government funds, and the forecasters were partially correct. Landlords and holiday home owners were expecting the tax applied to any profit when they sell an additional property to rise, especially as there has been an increase in the number of second home owners exiting the market (11.3% of all new properties listed for sale in Q3 2024 had previously been available for rent within the last three years, say figures from TwentyEA). In a surprise move, the Chancellor froze the capital gains tax thresholds applied to additional property sales. This remains at 18% for basic rate tax payers, and 24% for higher and additional rate tax payers. Instead, revenue will be generated by increasing the non-property assets tax rate, bringing it in line with that applied to additional residential property sales.

3. Inheritance tax thresholds were unchanged: none of the forecast inheritance tax changes materialised in the Autumn Budget, which is a relief for those whose property forms part of an estate. The value of an estate before inheritance tax is applied remains at £325,000, or £500,000 when a residence is passed to direct descendants and £1 million when a tax free allowance is passed to a surviving spouse or civil partner. The Chancellor also chose to freeze these thresholds until 2030. There were changes, however. From 6th April 2026, only the first £1 million of combined agricultural and business property will receive the full 100% relief from inheritance tax. Landowners will pay inheritance tax at a reduced rate of 20% on anything above this. The Chancellor will also apply inheritance tax to the majority of unused pension funds and death benefits from 6th April 2027.

4. Housebuilding got a £5 billion boost: we already knew that Labour wants more new homes built and the Chancellor revealed she is committing £5 billion to deliver the UK Government’s housing plan. The money will be split between the Affordable Homes Programme (£3.1 billion), a provision to increase the supply of homes and support small housebuilders (£3 billion), and support for new housing projects across the country (£128 million). As a result, we should see 3,000 energy-efficient properties nationwide and the development of 2,000 homes at Liverpool Central Docks, with more investment details to follow. Additionally, there will be an extra £1 billion to fast-track the removal of dangerous cladding on homes, following the Grenfell Tower report.

5. Some tweaks were made to social housing: the Chancellor used the Autumn Budget to try and encourage the creation of more new social housing and raise revenue that can be reinvested in current stock to improve its condition. As such, annual social rents in England are expected to rise by the CPI inflation rate plus an additional 1%. Right to Buy discounts will also be reduced to make purchases less attractive, with councils able to keep 100% of the receipts generated.