Spring Budget 2024- Abolition of Multiple Dwellings Relief

On Wednesday 6th March the Chancellor of the Exchequer Jeremy Hunt delivered the 2024 Spring Budget. In an election year the Budget is always important but what has this year's budget brought and what, if anything, do you need to do about it.

Prior to the Budget Michael Gove the Secretary of State for Levelling Up, Housing and Communities mentioned he had been lobbying for significant reform of the housing system and commentators wondered what that meant for Stamp Duty Land Tax (SDLT). As it happens there was little in the Budget that is a cause for concern from a property perspective and it certainly stopped short of the pre-election bonanza some had forecast.

There are though a few measures being introduced and if these apply to you then you may need to take pre-emptive action.

The most significant property related change is in relation to Multiple Dwellings Relief (MDR). It is being abolished. MDR is a bulk purchase relief from SDLT as MDR allows any purchaser buying two or more dwellings in a single transaction or linked transactions to calculate the tax based on the average value of the properties purchased as opposed to their aggregate value. It has been very useful to people not only buying bulk purchases but also other types of property where MDR could have applied - for instance a property with an annexe or what you may call the traditional "granny flat" as in those circumstances you are still purchasing "two" dwellings. The Government has decided though it needs to go.

The relief will be abolished entirely from the 1st June 2024. If you have already exchanged contracts on or before 6th March, you will be protected even if completion takes places after 1st June. If you have not already exchanged, then you still have time before this deadline, but the clock is now ticking. If you know that this applies to you or could potentially apply to a transaction you are looking to start then you need to take action immediately to ensure you can benefit from the relief.

Another measure introduced was the reduction in the rate of higher rate Capital Gains Tax for residential property disposals which will see the current rate cut from 28% to 24%. The lower rate will remain at 18%. The Government are intending to make this change operative from the 6th April 2024.Imporatant to note if you are currently disposing of a property or are intending to in the next few months.

The government are also seeking to remove the Furnished Holiday Lettings tax regime but that will not take place until April 2025.

So nothing groundbreaking but this could still have financial implications for the unwary.