News round up

Property matters in the UK are often in the headlines. Whether you are a homeowner or a landlord, it helps to stay abreast of the news and keep one step ahead of those changes that may affect your current – or planned – investments. Read on for our news round-up where we look over some of those headlines...

Relief for homebuyers as bill slashing Stamp Duty will become law

A law significantly reducing homebuyers’ liability for Stamp Duty has received its final reading before it is granted Royal Assent, reported the Mail Online recently Titled the Stamp Duty Land Tax (Temporary Relief) Bill, the enacted law will increase the threshold at which Stamp Duty becomes payable from the current £125,000 to £250,000. Only the balance of the purchase in excess of £250,000 becomes liable for Stamp Duty (at a rate of 5% for sums between £250,000 and £925,000; 10% for any sum between £925,000 and £1.5 million; and 15% on the balance of any sum above £1.5 million).

First-time buyers qualify for even more attractive relief – the first £425,000 of their purchase of a home will now be zero-rated for Stamp Duty (up from the previous threshold of £300,000).

First-time buyers will also qualify for such tax relief on the purchase of a home up to £625,000 in value – up from the previous limit of £500,000.

The measures introduced by this new legislation will remain in place until at least the end of March 2025.

By encouraging greater activity in the housing market – principally by granting buyers savings that can be used instead towards a deposit – the government envisages a significant fillip for this sector of the economy.

The principle of relaxing Stamp Duty liabilities is nothing new, of course. A slightly more favourable – but ultimately successful – Stamp Duty Tax holiday was introduced for the duration of the Covid pandemic from July 2020 until September 2021.

Capital gains tax allowance will be cut

In a review of those developments to which landlords should pay close attention in 2023, Which? magazine identified a hike in the Capital Gains Tax (CGT) thresholds as a notable milestone.

From the 6th of April 2023, the tax-free allowance on profits from the sale of investment property will be reduced from its current £12,300 to just £6,000.

In 2024 the allowance will be halved once again so that sellers can make only £3,000 in profit before incurring liability for CGT.