What’s Coming Up in the Budget for Agents?
The UK Autumn Budget on 30 October 2024 is likely to focus on taxation as Labour seeks to improve the books. Other areas could include corporate financial planning, pension schemes, and estate planning for clients with high net-worth. These could have significant implications for property management and letting agents. On the positive side, there may be incentives to make more properties green.
Key changes we foresee include:
Capital Gains Tax (CGT)
There’s speculation that CGT rates may be aligned with income tax rates, impacting property sales, shares, and business assets. Labour may also cut the annual CGT exemption (reduced in 2023 to £3,000) and may change reliefs like Business Asset Disposal Relief.
Inheritance Tax (IHT)
Pension pots might soon have IHT applied – which would influence estate planning for people of high net-worth. There’s also talk of widening IHT, whilst also reducing the rate. This would again impact trust and estate planning.
Pensions
With Labour looking to improve its financial standing, there could be reforms to pensions too. These might include reintroducing the Lifetime Allowance (LTA) or potentially taxing employer contributions. These would impact corporate clients’ pension schemes and might disrupt salary sacrifice schemes.
National Insurance
Rachel Reeves has just given a strong signal that while charges for employees will remain unchanged in the upcoming budget, National Insurance for businesses could well change. This was announced alongside a statement that businesses would be clearer about what future charges would be.
Energy Efficiency Standards
Stricter requirements for landlords are expected, to improve energy efficiency from a minimum EPC (Energy Performance Certificate) rating of C by 2030. This push aligns with the government’s focus on climate change. Letting agents may need to guide landlords through the process of applying for grants or loans for energy improvements, as non-compliance will make properties unrentable in future
Incentives for Green Housing
Landlords investing in eco-friendly improvements such as insulation or solar panels could benefit from new tax breaks. Letting agents should encourage their clients to take advantage of these, as they can improve property appeal and reduce tenant’s energy costs.
Letting agents will need to stay informed and guide their clients through these regulatory changes, from energy compliance to new tax changes. These adjustments could increase costs but also present opportunities for properties that align with the new energy efficiency and green development goals.
This period of transition in the rental market will require close attention to legislation and strategic advice to both landlords and tenants.
