Landlords face another tax rise, while first-time buyers have been given a helping hand in Chancellor John Healey’s first Budget. There were fewer property announcements than many expected, but several will affect buyers, sellers, landlords and homeowners in North London.
From April 2027, tax on rental income will rise by a further 2 percentage points, on top of the 2 percentage point rise announced in last year’s Budget. The new rates will be 24% for basic rate, 44% for higher rate and 49% for additional rate taxpayers. The Office for Budget Responsibility has warned that the rises could reduce the supply of rental homes and push rents up over time.
For first-time buyers, the new Your First Home scheme, backed by £4.7bn of government lending, launches next spring. Eligible buyers in England will be able to purchase a new-build home with a 2.5% deposit and a 20% government equity loan, interest-free for the first five years. In London, the price caps are £650,000 in inner London and £500,000 in outer London, with a household income cap of £140,000.
Lifetime ISA savers buying a home above the £450,000 limit will now get back at least what they put in, and a new First Time Buyer ISA will replace the Lifetime ISA for new savers from April 2029.
Elsewhere, owners of homes worth £2 million or more will pay the new High Value Council Tax Surcharge from April 2028. Households in council tax bands A to D will receive a £100 payment towards energy bills, and standing charges are being removed from gas bills. Stamp duty and Capital Gains Tax on property remain unchanged.
What does this mean if you’re moving? For landlords, April 2027 is the date to plan around, so now is a good time to review your rents, your portfolio and your plans. Our lettings team can help with the market side, and your accountant can advise on your own tax position.
For first-time buyers, the Your First Home scheme could make a new-build home more affordable, so it’s worth getting your finances ready ahead of its launch. For buyers and sellers, no change to stamp duty brings more certainty, so you can plan your move around today’s rules rather than waiting for relief.
If you are buying, selling or letting in North London and want to understand what the Budget means for you, our team is happy to talk it through.
Source: Estate Agent Today
— Drivers & Norris