At lunchtime today, the chancellor released his Autumn Statement, and whilst financial markets didn’t seem too fazed by the policies outlined in there, it may have raised eyebrows amongst landlords.

We’ll go over the key points for you & your property, as well as your tenants.

Firstly, the minimum wage for those over the age of 23 is to be increased from £9.50 to £10.42 per hour from April 2023, which will help tenants to cope with some of the extra costs they are faced with on a week-to-week basis.

Social housing rents will be increased to 7% for the year, rather than the typical inflation rate which would have seen them increase to 11%.

The energy price cap will also be increased to £3,000 per year - up from £2,500 - from April 2023 as well, which could have an impact on your overheads if you do all bills included, or have an adverse effect on your tenants & their finances.

Stamp duty savings will also be in place until 2025, meaning as a landlord you will only pay 3% stamp duty on up to £250,000 of the value of a property, instead of the previous figure of £125,000, whilst many home buyers won’t pay any stamp duty taxes up to £250,000. This has been done to help boost what is predicted to be a ‘slow’ housing market in 2023/24.

The 45% tax bracket now applies to income over £125,140 per year rather than £150,000, which, for some landlords with larger portfolios or other well-paying income streams, could mean you’re paying more tax each year than you have done previously.

Tax-free allowances on capital gains tax & dividends are set to be cut for next year and in 2024. Many landlords have opted for a company formation to avoid taxes such as Section 24, however, the £2,000 yearly dividend threshold for tax-free earnings is set to be cut to £1,000 for 2023, and halved again to just £500 for 2024.

The capital gains tax threshold will be cut from £12,300 to £6,000 for 2023/24, and then again to just £3,000 for 2024/25.

These higher tax rates are now leaving many landlords wondering if they should sell sooner rather than later if they want to tax full advantage of the gains in value their properties have made in recent years. 

Whilst these numbers aren’t being digested well with landlords, the average time to exchange on a property deal is now 19 weeks, which would take us to 30th March 2023, meaning you may not save in capital gains tax after all. 

A better option if you’re a landlord looking to utilise those gains could be re-financing, as interest rates on mortgages have been reduced across the board in recent weeks. 

Speak to us below if you’re worried about any of these tax changes and how they could affect your income or gains on your property, and the best path forward for you at this current time.