What will happen to taxes in 2024?
Anticipated changes and potential shifts in tax policies for the new year
The positive news for landlords is that the compulsory Class 2 National Insurance charge (currently £3.45 a week) has been abolished for self-employed tax payers from April 2024, and the cost of Class 4 contributions will drop from 9% to 8%.
However:
The tax-free personal allowance for Capital Gains Tax is halving again, from £6,000 a year to £3,000.
This means landlords disposing of property from April will pay tax on £9,000 more of their gains than in the 2022-23 tax year.
The Income Tax personal allowance remains frozen at £12,570 until 2027, rather than increasing each year roughly in line with inflation, as it did prior to 2022.
That means as your income rises, you will pay tax on a higher proportion of it.
Find out more about taxation for UK landlords in our complete guide to UK landlord tax.
For the past few years, the Government has been stating its intention to raise the minimum EPC rating to legally let a home from ‘E’ to ‘C’.
That was originally due to come into effect for new tenancies from 2025 and all tenancies from 2028, which would have made 2024 a ‘crunch’ year for landlords to make any necessary improvements to their properties.
However, in September 2023, Prime Minister Rishi Sunak announced that these plans were to be scrapped, with landlords and homeowners instead simply encouraged to upgrade energy efficiency where possible.
Meanwhile, in Scotland, the 2025 deadline for rented homes to achieve a minimum ‘C’ rating for new tenancies has just been dropped.
A new draft bill is now only proposing that all tenancies meet the ‘C’ rating by the end of 2028.
While we are awaiting confirmation and clarification on the plans for England, it’s important to bear in mind that tenants will be attracted to homes that are easier and cheaper for them to heat, so it’s well worth making improvements where you can.
And, of course, if Labour comes to power at the next election, they may well reintroduce the raising of minimum EPC standards.
See our ‘Ultimate guide to having an eco friendly property’ for information and advice.
The Prime Minister can call the next general election any time between now and 17 December 2024, with 28 January 2025 being the last date it can be held. As at December 2023, Rishi Sunak has not made any announcement, but we do expect an election in 2024.
The biggest impact on the property market would be a change of party at the top, in which case landlords may find themselves under extra pressure.
Labour has created its own Renters’ Charter, which is even more focused on tenants’ rights than the Renters (Reform) Bill.
These plans for reforming the private rented sector were announced in September 2022 and reiterated at the party’s recent conference. They include:
Scrapping Section 21 as soon as possible
Ending automatic evictions for rent arrears – which would mean no longer including serious rent arrears as a mandatory ground under Section 8
Introducing a four-month notice period for landlords
Including the right for renters to make "reasonable" alterations to a property and have pets
Labour has also committed to upgrading every home to EPC standard C “within a decade”, which may mean requiring private landlords to meet that minimum rating sooner.
For more on this, read our ‘Economic and property market update for 2024’.
