In a recent YouTube video, I shared my thoughts on the spring Budget 2024 property investing changes. You could spend hours and hours of research trying to find out the new rules that are coming in and the changes, or you could just watch the quick video (above) to get a summary version where I give you the main points. The video is particularly helpful if you're in business or if you're in the property industry.
In this article, I will highlight some of the key points from the video. If you want to get a full understanding of what this budget means for property investors, I highly recommend watching the full video until the end. If you find this article helpful, please share it on social media. The more education we can get out to fellow property investors, the better!
1. Spring Budget 2024 Property Investing: VAT threshold to increase from £85k to £90k
Right now, if you're in business, if your company's turning over £85,000 or more, then you need to become VAT (value-added tax) registered. That will affect you, especially if you're a deal sourcer or if you're in service accommodation. As soon as you turn over £85,000, you're going to have to pay that. If you're a landlord, that doesn't apply, but if you're a deal sourcer or any normal business it does.
They've slightly increased the VAT threshold so now it's gone from £85,000 to £90,000. If you're making £85k, you no longer have to be registered and pay an additional 20% value-added tax. The new limit is £90,000, so I guess that's good news!
2. Spring Budget 2024 Property Investing: Capital Gains Tax
Capital gains tax is only paid if you buy a house as an investment property, you don't pay capital gains tax if it's your home residence. But if you buy an investment property, and that property appreciates in value, you're going to have to pay tax on that uplift when you sell it.
At the moment, the higher rate capital gains tax threshold is 28%. So if you make £100ks in profit, that's quite a lot of tax. Good news is they've brought that down to a maximum of 24% from 28%, which is potentially going to save you money.
If you're buying through a company, you're going to pay corporation tax so it's not going to affect you anyway (as you don't pay capital gains tax). But again, that is a small victory for property investors.
3. Spring Budget 2024 Property Investing: Multiple dwelling relief to be abolished
They've scrapped multiple dwelling relief. Multiple dwelling relief was available if you were buying multiple properties at once or an apartment block. This would bring down your stamp duty. But there are many ways to save on stamp duty. I talk about some of them in the video above, which I highly recommend you watch!
4. Spring Budget 2024 Property Investing: Property taxation
The other thing that they've scrapped is furnished holiday let tax relief. Previously, if you had a furnished holiday let, there were certain things that you could do. For instance, you could offset your mortgage payments as tax-deductible. So there were certain loopholes and things you could do if you were running your property as a furnished holiday let. They have closed those loopholes now.
5. Spring Budget 2024 Property Investing: National Insurance reduced
They're also slightly reducing National Insurance. If you're self-employed or if you're employed, you will be paying national insurance tax. They've brought that down very slightly. They've said that the average person who is employed will save around about £450 a year on National Insurance. The average person that's self-employed will save around £350 per year.
I guess it's better than a prod in the eye with a sharp stick! Of course, it depends on how much you're earning, but there's a few hundred at least that the average person will save per year.
6. Not in the Budget…
Now, what wasn't announced in the budget but, is very good news, is they have relaxed the rules for permitted development. In 2020, they changed the law to allow you to turn a commercial building into a residential building without planning permission under permitted development rights (subject to prior approval). However, there's been a lot of stipulations that actually stopped you being able to do this.
One of those stipulations was the building had to be empty for 3 months before you could apply for permitted development rights. Well, guess what? They scrapped that! They also said that previously, if the commercial building was over 1500 square meters, you had to get full planning permission. Likewise, they scrapped that yesterday as well! So you can now use the prior approval process up to any size.
This is excellent news that wasn't talked about in the Budget! So overall, the last 24 hours, I think, has been a pretty big win for property investors and developers.
Beyond The Spring Budget 2024: Property Investing Strategies
No matter what the government does, property is always a great investment. So why not learn from a property expert? Join me at my next training event!
On the course, you will learn how to:
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Become a property investor using other people’s money so that you can get started straight away
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Utilise the 5 different types of raised finance so that you know exactly what to offer and when
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Find the perfect properties for the BRR strategy
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Recycle your money so that you can ‘rinse and repeat’
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Build a power team you can trust, so that you can save time and money
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And much more!
Tickets are only £1, and you can get yours here. If you are ready to take action, I hope to see you very soon!
