Chancellor Jeremy Hunt – who was only appointed to the role in October – recently laid out his tax and spending plans in an attempt, in part, to undo the damage of Liz Truss and Kwasi Kwarteng’s disastrous mini-Budget.
Hunt claimed he was delivering a plan that will tackle the cost-of-living crisis and rebuild the UK economy, pointing to unprecedented global headwinds as the reason for the tax rises and spending cuts he implemented to the tune of £55 billion.
He said his main goal was to prioritise stability, growth and protecting public services, and that his plans would lead to a shallower downturn and higher long-term growth.
But how do his announcements potentially affect sellers in particular?
Stamp duty cuts to be time-limited
In a surprise move, the Chancellor set out plans to eventually reverse the stamp duty cuts outlined in Kwarteng’s mini-Budget. Hunt said he will ‘sunset the measure’ from March 31 2025.
Only as recently as September, Kwarteng had upped the threshold at which stamp duty is paid on property purchases from £125,000 to £250,000. Meanwhile, the nil-rate threshold for first-time buyers had been increased from £300,000 to £425,000 on purchases worth up to £625,000.
The Treasury tweeted, shortly after Hunt’s announcement, that “stamp duty cuts announced in the Growth Plan will now be time-limited, ending on 31 March 2025. This is to help the jobs & firms that rely on the housing market through the current challenges, while strengthening the public finances in the longer term.”
It means we now effectively have a two-year stamp duty holiday, which could lead to an increase in sales in the lead up to March 2025 as buyers seek to make the most of stamp duty savings before they disappear.
Capital gains tax-free allowance halved
The Chancellor, in the early part of his near one-hour speech to the Commons, revealed that he would cut the tax-free allowance for capital gains in 2023-24 from £12,300 to £6,000, before then halving it again to £3,000 in 2024-25. This, the Treasury said, would help restore public finances and make the tax system fairer.
The change will hit landlords the most, but also those looking to sell their homes in the future as CGT is charged at a much higher rate for residential property sales.
“Expect to see a decline in the number of disposals – people will hold off from selling their assets during unfavourable conditions. Or, if there is a delayed introduction for the new threshold, look out for a quick spike in sales as individuals and families try to beat the new implementation date,” Tim Walford Fitzgerald, tax partner at HM Fisher, commented.
What else was announced?
The Chancellor’s fiscal address also outlined the government’s plan for a round 2 of the Levelling Up Fund, as well as an extension to the energy price guarantee for 12 months from April.
Furthermore, Inheritance Tax thresholds will be frozen for a further two years, along with Income Tax and National Insurance, while higher earners will start paying the top rate of tax (45%) when they earn £125,140. This is down from £150,000 previously.
He also uprated benefits and pensions in line with inflation, not wages, and said electric car owners will pay road tax from 2025.
To come to terms with what the Autumn Statement means for you, and to get the best possible price for your home, you need to work with an experienced, reputable estate agent. Here at Kings Group, we can help you to remain compliant and get the most from the sale of your home.
For more information on how we can assist you on your sales journey, please contact one of our branches in Essex, London or Hertfordshire today. We also offer a free and instant online valuation to give you an idea of how much your home could be worth on the current market.
