SDLT – An increase in SDLT was announced on non-primary residential dwellings from 3% to 5% wef from October 2024. Single rate SDLT payable by companies purchasing residential property was also increased on properties over £500K from 15% to 17%. So far however these increases have not been replicated on commercial property.
Capital Gains Tax – The government have confirmed that Capital Gains Tax (CGT) will rise for lower rate tax payers from 10% to 18% and for higher rate tax payers from 20% to 24%. This is having an impact already on the commercial property market with landlord’s that were considering selling their investment properties now reluctant to do so due to the higher tax implications. This in return reduces stock available for businesses and for other investors, which may cause values to rise.
Inheritance Tax – Agricultural property relief and business property relief is to be reduced which will have a big impact on farm land. In addition – pensions will now be included within your estate meaning that a higher level of inheritance tax is inevitable. This is directly impacting the commercial property market where it has been popular to invest in properties through your SIPP. It is likely over the coming year that people will start looking at gifting assets and will start drawing down on pensions in order to reduce their pension tax liability.
Business Rates – Retail, leisure and hospitality (RHL) have had the existing relief measures extended for a further year and permanently lower rates to be applied from 2026/27. The small business multiplier has been fixed at 49.9p. However more pertinent to the market we deal with, these lower multiplier for the RHL sectors will be funded by introducing higher rates on properties with RV’s above £500K with the large online distribution warehouses the main target.