What Can Bristol Landlords Expect in Next Week’s Budget?

Chancellor Rachel Reeves will deliver the autumn Budget on Wednesday, 30 October. Here’s what Bristol landlords can expect and how it might affect their rental portfolios.

Speculation and Budget Expectations

Leaks and rumours are common ahead of any major fiscal event, and Labour’s first Budget in 14 years has been no exception. While we know that income tax, VAT, and NI contributions won’t rise, the government has hinted that this Budget may be "painful." After months of fevered speculation

Capital Gains Tax (CGT) Changes for Landlords

When selling a rental property, landlords pay CGT on any profit. Currently, basic-rate taxpayers pay 18% and higher-rate taxpayers pay 24%. There are rumours of a CGT rate hike in the upcoming Budget, possibly aligning with income tax rates.

• Basic-rate taxpayers: 18%
• Higher-rate taxpayers: 24%
• Potential increase: TBD

Impact on Bristol Property Sellers

If you’re considering selling a buy-to-let property, it’s worth reviewing your options carefully. Contact us for tailored advice on managing your property portfolio and optimising your tax strategy.

Inheritance Tax (IHT) Updates

Currently, IHT is paid at 40% on estates above £325,000, though there are exemptions. There is speculation that this threshold may decrease, potentially impacting more estates. Some predict that pensions may also come under the IHT umbrella.

Inheritance Planning for Landlords

If these changes materialise, they could affect the long-term financial planning of landlords. Be sure to speak with a financial adviser. For advice on safeguarding your estate, check out our landlord services.

Energy Efficiency Measures for Rental Properties

The government’s focus on energy efficiency continues, with plans for all rental properties to achieve an EPC rating of C by 2030. There’s speculation that the Budget could introduce grants or other measures to help landlords upgrade their properties.

How to Ensure Your Property is Compliant

Unsure about how to meet the new EPC requirements? Our property consultants can help you plan upgrades and stay compliant with evolving regulations.

Possible Pension Changes for Landlords

At present, you can withdraw up to 25% of your pension (up to £268,275) tax-free at 55. However, it’s rumoured that the Chancellor may reduce the size of this tax-free lump sum or make pension contributions less generous for high earners.

Plan for the Future

If you’re using your pension for property investments, it’s wise to keep an eye on these potential changes. Get in touch for advice on the best investment strategies in light of these updates.

Key Takeaways for Bristol Landlords

While it’s easy to get caught up in speculation, most changes won’t come into effect until April 2025 at the earliest. Be cautious about rushing into decisions, especially when it comes to selling properties quickly to avoid possible CGT rises.

• Avoid rushed property sales to "quick-sell" companies or auctions.
• Speak to a financial adviser before making significant changes.
• Monitor the economy and market for favourable conditions.

Economic Outlook for Bristol Landlords

There’s reason for cautious optimism. Inflation has fallen to a three-year low of 1.7%, and rental demand remains strong, with a 8.6% increase in private rents over the last year (source: ONS). Meanwhile, house prices are at a two-year high.

Professional Advice for Landlords

Given the complexity of tax and property regulations, always seek professional advice. A financial adviser can help you plan for the long-term while navigating changes in tax policy.

For specific advice tailored to your property portfolio, contact us at Sarah Clark Property Consultants today.