Industry exoerts have commented on the 2024 Spring Budget

Spring Budget 2024: Hunt 'really missed an opportunity to increase transactions' but capital gains tax reduction welcomed

Yesterday (6th March), the chancellor of the exchequer Jeremy Hunt, announced the Spring Budget to parliament.

The government confirmed plans to increase VAT registration for SMEs from 1st April this year from £85,000 to £90,000, and the deregistration threshold from £83,000 to £88,000.

The chancellor also announced the allocation of £200m to extend the RLS, which will be renamed the Growth Guarantee Scheme, in order to support 11,000 small businesses to access finance.

National Insurance for employed workers would also be cut by 2p from 10% to 8% — this was alongside a 2p cut for self-employed workers on top of the 1p cut from the Autumn Statement, meaning a 9% to 6% reduction for the main rate of Class 4 NICs for the self-employed from April 2024.

Hunt also announced that capital gains tax (CGT) for residential property disposal would be reduced from 28% to 24%, while lower rates would remain at 18% for gains which fall within individual basic rates bands — private residential relief will remain in place.

Industry professionals have had their say on the Spring Budget 2024:

Charlie Wells, managing director at Prime Purchase, said: “The chancellor has really missed an opportunity to increase transactions and boost not only the property market, but the wider economy — If he really wanted to get the economy moving and encourage activity, he should have offered incentives, such as a stamp duty holiday, to encourage people to buy and sell.

“Even if a stamp duty saving is minimal in the grand scheme of things, it gives people more confidence to transact and make decisions — then, as soon as the house is bought, it makes a big difference to other industries — painters, decorators, builders, interior designers, furniture makers, gardeners, builders’ merchants — it’s not just estate agents and solicitors who benefit from an uptick in property transactions.

“It is unsurprising that multiple dwellings relief is being abolished as it was open to abuse in some instances and may have been regarded as allowing wealthy people to get away with paying less tax.

“However, I am not sure it will make a huge difference to the chancellor’s tax take as it involves a relatively limited number of deals.

“Having said that, within an hour of the Budget statement I’d had two clients call me to ask about it so my advice would be to those thinking of utilising this relief to get on with their transaction before 1st June.

Duncan Kreeger, CEO and founder of TAB, commented: “Today's reduction in capital gains tax rates marks a significant milestone for investors, signalling a potential turning point in what has been a stagnant and sluggish market — we hope that this change will inject much-needed vitality into the UK property market, increasing transaction levels and unlocking new investment opportunities.

"Government support is essential to catalyse meaningful momentum — we applaud the government's efforts to bolster investor confidence; however, there remains a collective imperative to revitalise the economy and stimulate robust economic activity.

“We urge the government, and a future government, to look for further measures to ensure sustained growth and prosperity."

Anna Clare Harper, CEO at GreenResi, added: “The trouble with short-termist budgets is that they fail to address the major problems of the day, which are long term and complex.

"Housing in particular is complex, and politicians from all parties favour vote-winning policies over the kind of policies and incentive schemes that might make a real positive impact.

"As a result, meeting the housing needs of the next generation is increasingly in the hands of institutions: pension funds and banks who take a longer-term view and are not motivated by vote winning."

Ryan Etchells COO at Together, also said: “Cutting the higher rate of CGT on residential property sales by 4% and keeping the lower rate at 18% is a welcome move to help extend the market to a new wave of buyers and property professionals.

“This will offer confidence to those who have put off the option of downsizing, opening up more family homes and spaces for first time buyers. This should provide the property market with a much-needed shot in the arm.”

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