The Autumn Budget 2022 was introduced by Chancellor Jeremy Hunt to deal with inflation and keep mortgage rates down. This blog will discuss the new measures following the 2022 Autumn Budget.
Capital gains tax relief allowance halved
From 2023, the Annual Exempt Amount for capital gains tax will be reduced from £12,300 to £6,000, and then it will decrease again to £3,000 from April 2024. This will affect property owners, second home owners and those looking to sell their property as capital gains tax is applied at a much higher rate for residential property sales.
Stamp duty cut to remain – but only until 2025
The Chancellor announced that the mini-budget will remain in place until March 31 2025. The threshold for property prices before paid stamp duty will remain as £250,000, higher than the previous threshold of £125,000.
Social housing sector rent cap to be introduced
By next year, it is predicted that the social housing sector will see rent hikes of approximately 11%. This led the government to announce a 7% cap on rent increases for social rents in 2023-24 with the aim of supporting tenants to save at least £200 next year. The rent cap does not apply to shared ownership rents or private sector rents.
Dividend allowance will be cut from 2023
The dividend allowance will be cut from £2,000 to £1,000 in 2023, and then drop further to £500 in April 2024. This will impact property owners using limited company structures as they pay themselves and other shareholders dividends from their rental profits.
Threshold for top rate of income tax cut
Higher-earning property owners will begin paying the 45% top rate of income tax, as the threshold will be brought down from £150,000 to £125,140. Therefore, property owners earning £150,000 or more will pay just over £1,200 more a year.
The National Living Wage will increase
Currently, the National Living Wage in the UK is £9.50 an hour for over-23s. This is expected to increase by 9.7% to £10.42 – an annual pay rise worth £1,600 to the average worker and the largest increase in the UK’s national living wage ever. This will give tenants (who are currently on the minimum wage) some financial security.
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