How the 2024 Autumn Budget Impacts Landlords: Key Takeaways and Future Considerations

 1. Capital Gains Tax (CGT) on Buy-to-Let (BTL) Property Sales Stays the Same

There had been considerable speculation that CGT on property sales might align with income tax rates, potentially pushing it as high as 45% for top-rate taxpayers. Instead, the Chancellor, Rachel Reeves, chose to increase current CGT rates to 18% for basic-rate taxpayers and 24% for higher-rate taxpayers.

With capital gains tax remaining unaltered on the sale of buy-to-let properties and second homes, this decision allows landlords to avoid a steep tax increase when selling a property, reducing pressure to exit the market and helping to maintain rental stock.

What Landlords Need to Do Next
Review your investment strategy in light of the unchanged CGT rates. If you are still considering selling a property, now is a good time to consult a tax advisor to make the most of CGT allowances and explore ways to optimise your portfolio. Retaining properties for the longer term can be beneficial in the current environment, especially as property values remain steady and rental demand remains high.

2. Land Transaction Tax (LTT) Surcharge Increase on Second Properties

In Wales, landlords purchasing additional properties will now face a 5% Land Transaction Tax (LTT) surcharge, up from the previous 3%. This increase affects those expanding their buy-to-let portfolios and individuals looking to invest in second homes. For a typical £300,000 investment property, the rise translates to an extra £6,000 in upfront costs, which may impact smaller investors and could lead to fewer new rental properties entering the market.

What Landlords Need to Do Next
If you are expanding your portfolio, carefully review the expected return on investment (ROI) to ensure the additional LTT cost is offset by future rental income. Consider properties in areas with higher rental yields to balance out the surcharge, or explore refinancing options that may reduce your overall costs. Expanding in areas with lower property prices can also help mitigate the impact of this surcharge.



3. Energy Efficiency Incentives and EPC Requirements

The UK government’s continued focus on carbon reduction has led to new measures encouraging landlords to improve their properties’ energy efficiency. By 2030, all rental properties will need to meet a minimum Energy Performance Certificate (EPC) rating of “C.” The budget includes grants covering upgrades like insulation, double glazing, and modern heating systems, available to landlords in Wales through schemes such as Nest and ECO4, as well as potential tax reliefs on qualifying upgrades.

What Landlords Need to Do Next
Start assessing your rental properties to identify which may need EPC upgrades. Investigate the available grants and tax incentives to help cover these costs, and consider spreading upgrades over the next few years to avoid a last-minute rush before the 2030 deadline. For larger properties or portfolios, look into “green” mortgage options that offer lower interest rates for properties meeting high EPC standards, as these can provide additional financial relief while upgrading.

4. General Regulatory and Financial Pressures on the Rental Sector

Beyond the specific measures in the 2024 Autumn Budget, landlords face ongoing regulatory and financial pressures that will shape investment decisions. The budget’s measures are part of a larger trend that includes increased compliance requirements, safety standards, and evolving tax policies in Wales. For those with larger portfolios, absorbing these costs may be manageable, but smaller landlords will need to consider ways to streamline management to maintain profitability. With mounting responsibilities and evolving standards, rental property owners need to be proactive in staying compliant.

What Landlords Need to Do Next
Plan ahead to keep your property management efficient. For instance, investing in property management software can help track maintenance schedules, tenant requests, and regulatory deadlines. For some, outsourcing property management will save time and ensure that properties remain in compliance with energy, safety, and legal standards. By planning strategically and leveraging available incentives, landlords can keep their properties compliant, attractive to tenants, and financially viable in the changing landscape shaped by the 2024 Autumn Budget.

Let Redkey Help!

It’s easy to become overwhelmed when managing your rental property in Newport and beyond. That’s why more landlords are choosing to work with professional property management companies like us. We bring expertise, tools, and a level of thoroughness that ensures you get the best advice and stay compliant. We take the hassle out of managing your rental property so you can focus on what matters most — whether it’s growing your property portfolio or simply enjoying a stress-free experience as a landlord.

Call us on 0333 3447850 or email hello@redkeylets.co.uk for more information on how we can assist you with property management.



Frequently Asked Questions About the Autumn 2024 Budget and Landlords in Wales

What is the new LTT surcharge on second properties?
The surcharge has increased from 3% to 5% for second homes and investment properties in Wales. This increase makes buy-to-let purchases more expensive upfront, especially impacting smaller investors and first-time landlords.

Has the Capital Gains Tax (CGT) rate changed for property sales?
No, CGT on residential property sales remains at 18% for basic-rate taxpayers and 24% for higher-rate taxpayers. This decision aims to avoid reducing rental housing supply by keeping CGT at existing levels.

What energy efficiency requirements will landlords need to meet?
By 2030, all rental properties must have an EPC rating of “C” or higher. Grants like Nest and ECO4, along with tax relief, are available to help landlords fund necessary improvements, such as insulation and efficient heating.

Is there tax relief for energy efficiency improvements?
Yes, landlords can benefit from tax relief on qualifying energy efficiency upgrades, helping to offset the cost of meeting new EPC standards. Additional grants are available to support installations like double glazing and efficient heating.

How does the budget affect smaller landlords versus larger property investors?
Smaller landlords may struggle more with the increased LTT and upcoming EPC upgrades. Larger investors may find it easier to manage these costs due to economies of scale and the ability to spread improvements across a larger portfolio.