Spring sprang in Jeremys Hunts 2024 Budget with a revision to a number of property taxes;
• CAPITAL GAINS TAX (CGT)
Hunt announced a reduction to the higher rate of CGT on residential property sales from 28% to 24% with effect from 6 April 2024 – with the lower rate of CGT remaining at 18% - in the hope it will lead to more transactions.
• STAMP DUTY LAND TAX(SDLT) -
Hunt went further by announcing Multiple Dwelling Relief (MDR) a SDLT relief, was to be abolished. MDR – represents a reduction in SDLT where there is more than one dwelling in the purchase – resulting in a reduction in tax payable by the buyer.
The government brought in MDR, in 2011 to encourage investment in residential property, by creating a tax saving when buying several properties at the same time or one large property divided into dwellings, or in a situation where a number of property transactions are carried out between the same buyer and seller – known as a linked transaction. Find out more here.
MDR is calculated by taking the average price of each dwelling and only charges the rate applicable to that average price (as opposed to their aggregate value), representing a SDLT saving for the buyer.
An Example Of MDR Tax relief
Dwelling subdivided into 4 flats - Sale Price - £1,000,000
SDLT - £71,250 – After June 1St
SDLT payable with MDR Relief - £30,000 – Before June 1st
Total Tax Savings - £41,250
MDR will be abolished on 1 June 2024 – this has resulted in a number of our clients ‘springing’ into action bringing multiple properties to the auction room ahead of June 1st knowing the remaining weeks of MDR Relief will mean potential purchasers will have more money in their pockets to bid at auction with less tax liability upon completion!
If you’ve been considering buying or selling multiple units at auction ‘time is of the essence’ for you to capitalise on the tax relief that has been in place for 13 years (unlucky for some) and which will potentially present an opportunity for you to achieve the best possible result at auction.
APRIL 25TH AUCTION + MARKETING + VIEWINGS + MDR = TAX EFFICIENT SALE PRICE !!!
EXPEDITE YOUR MDR PROCESS BEFORE IT’S TOO LATE!!!!
GIVE THE AUCTION DEPARTMENT A CALL ON 01273 201989
