Budget 2024: Key points at a glance

The new Labour government recently revealed their first Budget since 2010. What was in the Budget and what does it mean for you?  

Housing

The government announced that the stamp duty surcharge, a tax paid when you buy a second home, rose from 3% to 5% on 31st October. Single homeowners currently pay stamp duty on properties valued at £250,000, but the government has said the threshold will drop to £125,000 in April 2025¹. First-time buyers will also be affected, as they will have to pay stamp duty on properties worth £300,000 - a drop from £425,000¹. So, what does that mean for homeowners and would-be buyers?

What is stamp duty?

Stamp Duty Land Tax (SDLT) is a tax that you have to pay when you buy land or property over a certain price in England and Northern Ireland. The amount of stamp duty you pay depends on what you’re using the property for: if it’s for you to live in or if you’ll be renting it out as well as if you own any additional properties.

In 2022, Liz Truss’s government doubled the threshold for stamp duty from £125,000 to £250,000 for single homeowners. The threshold for paying stamp duty on a first time property went up from £300,000 to £425,000. These higher thresholds are set to revert back to previous levels in April 2025, which is a reversal of Truss’s tax cut. You will have to pay stamp duty on properties worth £125,000 or £300,000 if you’re a first-time buyer from early next year. ¹

Lowering the threshold for stamp duty will mean higher prices for many people and make the housing market less accessible. It can also increase stagnation in the market by making it harder to move or buy. Stamp duty encourages people to stay where they are when they might otherwise consider downsizing, which reduces the supply of houses on the market. This tax can add thousands of pounds to an already expensive purchase.

How do you pay stamp duty?

You pay stamp duty by filling in a SDLT return and sending it to HMRC within 14 days of completing the purchase. Your solicitor, agent or conveyancer will usually do this for you.

The rest of the Budget includes:

Transport

The cap on bus fares has increased from £2 to £3 and an extra £500m will be spent on repairing potholes¹.

Government spending

Daily spending on the NHS and education in England will rise by 4.7% in 2024¹.

Defence spending will go up by 2.9bn in 2025¹.

Local councils will get £1.3bn extra funding next year - and keep all the money from the Right to Buy scheme¹.

UK Growth

The office for budget responsibility predicts the UK economy will grow by 1.1% and inflation will average at 2.5% this year¹.

Sources

1. https://www.bbc.co.uk/news/articles/cdxl1zd07l1o

All the information in this article is correct as of the date of publishing. The opinions expressed in this publication are those of the authors Euxton Mortgage Market. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

November 2024