Key Takeaways from Rachel Reeves’ Budget Announcement 2024
Chancellor Rachel Reeves delivered a landmark budget announcement that outlines crucial tax reforms and spending initiatives in the UK. This white paper summarizes the main takeaways from the announcement, highlighting the implications for the real estate market and potential opportunities for investors.
Key Takeaways from the Budget Announcement
Historic Tax Increases
- A total of £40 billion in tax rises to stabilize public finances and rebuild public services.
- The primary revenue increase comes from a £25 billion rise in employer National Insurance contributions.
2. National Insurance Changes
- Employers will see National Insurance contributions rise from 13.8% to 15% on salaries over £5,000.
- The threshold for paying National Insurance will drop from £9,100 to £5,000.
3. Public Spending Boost
- An additional £22.6 billion allocated for NHS spending.
- £6.7 billion earmarked for education investment, including rebuilding over 500 schools.
4. Taxation on Capital Gains and Inheritance
- Basic rate capital gains tax increased from 10% to 18%; higher rate from 20% to 24%.
- Inheritance tax threshold freeze extended until 2030.
5. Housing and Stamp Duty
- Stamp duty surcharge on second homes to increase from 3% to 5%.
- Aimed at supporting first-time buyers and easing the housing market.
2. Strategies for Maximising Investment Opportunities
Use Corporate Structures
- Consider holding properties within a Limited Company for lower tax rates compared to personal ownership.
- This can increase borrowing potential and allow reinvestment of profits without immediate tax implications.
Focus on New Builds & Sustainable Developments
- New Build with higher quality and amenities as well as Sustainable developments are likely to become more desirable, enhancing rental demand.
Opportunities for Commercial Properties
- Demand for commercial properties will rise due to government-funded projects in public services.
- Investors should look for commercial properties in health and education sectors.
Strategic Buy-to-Let Investments
- Investors should consider purchasing properties with six or more units, potentially benefiting from reduced stamp duty.
- Forming partnerships or acquiring properties through a corporate structure could yield tax advantages.
Karim Salame – [email protected]
McGardens Estate | October 2024 | www.mcgardens-estate.com
Sources: BBC News – Rachel Reeves Budget Announcement; HM Treasury – UK Government Financial Report; Office for Budget Responsibility – Economic Indicators; UK Government – Taxation and Spending ReportsOctober 2024 | www.mcgardens-estate.com