23 November 2022
The Chancellor, Jeremy Hunt, recently gave his Autumn Budget 2022, with the intention of dealing with inflation and keep mortgage rates down for homeowners.
The Chancellor, Jeremy Hunt, gave his Autumn Budget 2022 at lunchtime, intending to deal with inflation and keep mortgage rates down for homeowners.
We take a look at what this would mean for Yorkshire landlords and homeowners thinking of buying and selling in particular.
Capital Gains Tax Changes
In the Budget, the CGT relief allowance has been cut from £12,300 to £6,000 for the next tax year (2023/4) and then cut again to £3,000 for 2024/5.
Therefore, if you are a basic rate taxpayer, you will end up paying £1,134 extra in CGT after April 2023 (and £1,764 if a higher rate taxpayer) and a further extra 50% on top of those figures in tax year 2024/5.
Only second homeowners and landlords pay Capital Gains Tax on the difference between the price you paid for the property and the price you sold it for. (Note- it is not paid on any gain of your principal residence)
This will be unwished-for news for Yorkshire landlords and second-home owners.
Even if you have no intentions of selling your portfolio in the next five to ten years, there are things you could be doing now to reduce your CGT liability in the future. However, there are various reliefs [name of town] landlords can apply to HMRC for that will reduce the CGT liability.
Is it worth selling your Yorkshire rental property now? Well, the average conveyancing time for UK property from sale agreed to exchange of contracts is 19 weeks, which takes us to 30th March 2022…all to save £1,764 …all at a time when rents have rocketed by 19% in the last two years.
Stamp duty cut to stay - but only until 2025
Kwasi Kwarteng's cut to stamp duty in England announced in his September Budget will remain until 31st March 2025.
Jeremy Hunt stated because housing activity will be slower in 2023/4, the stamp duty cuts announced in Kwarteng’s mini-budget will remain in place for the next two years and four months.
This means that the price of a property before stamp duty is paid will stay at £250,000, up from the previous level of £125,000 until March 2025, then drop down to the old rates.
This will be good news for Yorkshire home buyers and landlords in the coming years.
If you have any questions, please don’t hesitate to call your local branch today! Similarly, if you would like some names of good local Yorkshire accountants, drop us a line and we can suggest some for you.