London landlords received unexpected news from Chancellor Jeremy Hunt in the recent Spring statement, which unveiled several changes affecting property owners and investors across the city.
In a significant move aimed at stimulating property transactions, the Chancellor announced a reduction in the higher rate of Capital Gains Tax from 28% to 24%. This bold decision is expected to incentivise landlords and second homeowners to consider selling their properties, thereby increasing the availability of housing stock for a diverse range of buyers, including those eager to step onto the property ladder. Hunt emphasized the potential for increased revenues resulting from higher transaction volumes, stating, “Reducing the higher 28% rate for residential property will likely lead to a surge in transactions.”
In line with the government’s vision for long-term growth, the Chancellor also made changes targeting specific aspects of the property market. One notable adjustment was the abolition of the Furnished Holiday Lettings tax regime, effective from April 2025. This regime provided additional tax reliefs for costs associated with furnishing holiday lets, creating an imbalance between short-term holiday rentals and traditional long-term rentals. By removing this incentive, the government aims to encourage landlords to prioritise longer-term rental options, contributing to a more stable housing market.
Furthermore, the Chancellor announced the discontinuation of multiple dwellings relief, a stamp duty relief previously available to individuals purchasing multiple properties in a single transaction. Despite its intended purpose of supporting investment in the Private Rented Sector (PRS), this relief was found to be frequently abused and ineffective in achieving its goals. As a result, the government deemed it necessary to eliminate this provision.
It’s important to note that properties with contracts exchanged on or before 6th March will still benefit from multiple dwellings relief, regardless of their completion date. Additionally, any purchases completed before 1st June will also be eligible for this relief, ensuring a smooth transition for ongoing transactions.
These changes signal a shift in government policy aimed at promoting fairness and efficiency within the property market while addressing the evolving needs of both landlords and tenants in London. As landlords navigate these changes, staying informed and adapting strategies accordingly will be crucial for maintaining success in the dynamic real estate landscape of the city.
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