The 2024 UK Autumn Budget announcement brings key changes that affect property investors in different ways. Whilst some of those changes increase the tax burden on property investors, GetGround believes the overall outcome is positive. See what Moubin Faizullah-Khan, CEO of GetGround, has to say...
With adjustments to both Stamp Duty Land Tax (SDLT) and Capital Gains Tax (CGT), it’s important to understand how these updates might impact your current and future investments. With reduced uncertainty, landlords are able to make more informed decisions for their portfolios going forward.
At GetGround, we understand the work, effort, and care that goes into maintaining a buy-to-let portfolio. We also know that frequent changes in tax policy can feel challenging, even overwhelming; still, residential property remains one of the top performing, and most resilient asset classes in the world.
Our aim here is to walk you through exactly what these changes mean and provide some insights on how you can best navigate the landscape ahead.
If you’re buying additional buy-to-let properties…
If you're planning to expand your portfolio, the increase in the SDLT surcharge on additional properties from 3% to 5% may influence your buying decision. This change means a higher upfront cost, which could be particularly challenging if you’re financing your purchase or already balancing other property-related expenses. You can find out how much you’ll now have to pay on a new property purchase with a Stamp Duty Land Tax calculator, whether you’re buying in England, Scotland or Wales to plan your finances.
However, there are still ways to work within these new changes. For example, running the numbers on different investment scenarios can help you understand whether buying now is the best move, or if there are ways to make the increased cost work within your long-term goals. An example is investing through a limited company, which can help alleviate some costs with the ability for mortgage deductions.
If you’re selling your buy-to-let company…
For those considering selling a buy-to-let property company outright, the higher CGT rates mean that you’ll see more of your profits going to taxes. The basic rate on shares or other investments has risen from 10% to 18%, and the higher rate from 20% to 24%.
However, when selling the shares of your buy-to-let company, your buyer will be subject to Stamp Duty Reserve Tax (SDRT), rather than SDLT, which is currently 0.5%. This gives you the opportunity to increase the price of your property when you sell, while still allowing the buyer to pay a discounted amount to what they would if they were buying a property owned in your personal name. This is another example of how strategy when investing can still allow you to remain profitable even with these legislation changes.
If you’re holding your current properties in your existing portfolio…
If your plan is to retain your current properties and focus on rental income, the budget changes won’t directly impact your ongoing income. Tax rates on rental profits, dividends, and income bands remain unchanged, so you can expect continuity on this front. That said, higher costs for those entering the market could eventually have ripple effects on rental supply, potentially influencing demand and rental income. This is something to keep an eye on if you’re a long-term landlord, as shifts in the market could present opportunities or challenges depending on your property and location.
What does this all mean for buy-to-let investors?
These changes might feel restrictive, but they also underscore the importance of strategic planning. Buy-to-let investors should consider not only immediate costs but also the long-term benefits of different structures, such as limited companies, that may mitigate tax impacts. For those holding onto properties, it’s a nudge to ensure that your portfolio is as resilient and optimised as possible in an evolving tax landscape by using the most cost-effective services.
At GetGround, we know that changes like these can be challenging. You put in time, care, and capital to make your investments work, and shifting policies add new layers to navigate. We’re here to provide clarity on these complexities, and to offer practical tools and solutions so you can make decisions that align with your investment goals, whatever they may be.