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Autumn Budget 2024: landlords and holiday home owners face stamp duty hike
In today's Autumn Budget, Chancellor Rachel Reeves announced an immediate stamp duty hike for landlords and homeowners purchasing second properties.
The stamp duty surcharge, currently charged at 3% for those buying additional properties, will rise to 5%.
Read on to find out how the change will impact tax bills, and to learn about the other key property-related announcements from today's Budget.
Second home stamp duty bills to rise by thousands
A two percentage point increase in stamp duty on buy-to-let properties and second homes will come into force in England and Northern Ireland from tomorrow (31 October).
The rise will apply across all stamp duty bands, as shown in the table.
| Tax threshold | Stamp duty rate | Stamp duty rate from 31 October 2024 |
|---|---|---|
| £0-£40,000* | 0% | 0% |
| £40,000-£250,000** | 3% | 5% |
| £250,001-£925,000 | 8% | 10% |
| £925,001-£1,500,000 | 13% | 15% |
| £1,500,001+ | 15% | 17% |
*If total property price is £40,000 or less. **If total property price is more than £40,000, you'll pay the surcharge on the whole cost of the property.
The change means landlords and second-home buyers purchasing a property at the average UK price of £293,000 will face a tax increase of more than £5,500.
The government says the move is designed to provide an advantage to first-time buyers and home movers buying properties to live in themselves.
It estimates the change will result in 130,000 more property sales to owner occupiers at the expense of landlords and second home buyers.
We've updated our stamp duty calculator to reflect the new rates payable on second properties in England and Northern Ireland.
Other stamp duty reliefs to end in April
The current stamp duty relief for first-time buyers and home movers, which was introduced in September 2022, will end as planned on 31 March 2025.
From 1 April, home movers will pay stamp duty on purchases over £125,000, rather than the current £250,000.
The current stamp duty threshold for first-time buyers will drop from £425,000 to the previous rate of £300,000.
Despite some hopes that the government would extend the relief in the Autumn Budget, no announcement was forthcoming.
- Find out more:stamp duty rates and calculator
Government announces housebuilding drive
The Autumn Budget also introduced a number of measures designed to improve housing stock.
First, social housing rents in England will increase annually by the Consumer Price Index (CPI) measure of inflation plus an additional 1%. The government hopes that this will increase confidence in the sector and result in more social housing being built.
The government also pledged £500m in funding to build up to 5,000 additional affordable homes.
Finally, the Chancellor confirmed that discounts available under the Right to Buy scheme will be reduced and councils will keep all the receipts generated by sales.
- Find out more: key Autumn Budget announcements
Funding pledged to remove dangerous cladding
£1bn of funding will be provided to accelerate the removal of dangerous cladding on flats.
Part of this funding will be used to speed up remediation of social housing, with further details to follow later this autumn.
What wasn't in the Autumn budget?
Today's Budget focused on stamp duty increases and measures designed to improve the supply of new homes.
Despite some speculation, the Chancellor didn't announce any new schemes or initiatives directly designed to help first-time buyers get on the housing ladder, or changes to lifetime Isa price limits or withdrawal penalties.
However, the government confirmed that it will consult with lending industry on the mortgage guarantee scheme, aiming to make it permanently available to support lending for people with a 5% deposit.
- Find out more: best mortgage rates for October 2024
