Key Points for Residential Property and what it means for the Residential Property Market Chancellor John Healy has delivered his first budget. Here are key takeaways for the Residential Property sector: Stamp Duty Land Tax There was no mention of...
Key Points for Residential Property and what it means for the Residential Property Market
Chancellor John Healy has delivered his first budget. Here are key takeaways for the Residential Property sector:
Stamp Duty Land Tax
There was no mention of Stamp Duty Land Tax and the current thresholds remain in place for those purchasing in England. First time buyers still have relief available to them and there are still additional surcharges on second homes.
Land Transaction Tax in Wales also remains unchanged.
Mansion Tax
The Mansion Tax, also known as the “High Value Council Tax Surcharge is set to take place in Apri l2028 and is to be billed separately form council tax. The surcharge applies to residential properties in England with a value of £2 million or more, affecting 1% of residential properties in England. The band rates are:
• £2,000,000 to £2,500,000: £2,500 per year
• £2,500,000 to £3,500,000: £3,500 per year
• £3,500,000 to £5,000,000: £5,000 per year
• Over £5,000,000: £7,500 per year
Landlord’s, buy to lets and second homes
Rental income tax rates rise to 24% (basic rate), 44% (higher rate) and 49% (additional rate) from April 2027 which will come as a disappointment to landlords.
There was no mention of any changes to Capital Gain tax on property sales and the current thresholds remain in place. (18% for basic-rate taxpayers and 24% for higher/additional rate taxpayers), with an Annual Exemption of £3,000. Reporting and paying Capital Gains Tax must be done within 60 days of completion of the sale of the property.
Mortgage affordability
The Office for Budget Responsibility has forecast that the average mortgage interest is expected to rise from 4% to 5% by 2031, affecting affordability and disposable income for those buying with mortgages or looking to re-mortgage.
First Time Buyers
The “Your First Home Scheme” will commence in Spring 2027. The scheme enables first time buyers to access an equity loan worth 20% of their property’s value, whilst putting down a minimum deposit of 2.5% on a property, priced up to £650,000. The scheme has similarities to the previous government Help to Buy Equity Scheme which was abolished in 2023 with a hope of boosting new build demand and helping first time buyers get on the property ladder.
A new First Time Buyer ISA will replace the Lifetime ISA.
The penalty for unauthorised use will also change, meaning if your house costs more than the limit (£450,000) you will still get back what you paid in.
Those who are currently buying or selling, or considering a transaction in the coming months, should seek advice on how any changes may affect their plans.
Our Residential Property team at Lee Bolton Monier-Williams continue to advise clients on the legal and practical implications of developments affecting the property market. If you require further assistance or advice following today’s Budget, please do not hesitate to contact us and our team would be delighted to assist you.
