In a pivotal Budget announcement, Chancellor Jeremy Hunt introduces measures to reduce capital gains tax, offering support for first-time home buyers and implementing major reforms in family welfare to ease the high-income child benefit charge.
On March 6, 2024, significant announcements were made by Chancellor Jeremy Hunt affecting the UK property market and family welfare. In a Budget that proposed various changes, notable attention was given to housing taxes, support for first-time home buyers, and child benefit charges.
For the property market, the Chancellor announced a reduction in capital gains tax for residential properties from 28% to 24% for higher-rate taxpayers starting in April. This move, aimed primarily at private landlords and second homeowners, is expected to encourage more property sales and increase tax revenue. Furthermore, the government revealed plans to abolish tax relief for some holiday lets in 2025 and end multiple dwelling relief, projecting additional revenue of £605 million by 2025-26. These measures are designed to address the housing crisis by making more properties available and encouraging landlords to sell, thereby increasing the housing supply.
Despite these adjustments, there was disappointment among finance experts and industry representatives over missed opportunities to offer more direct support to first-time buyers, such as a proposed 99% mortgage scheme that was not included in the Budget. Critics argue that while some tax adjustments were welcome, further innovations are necessary to help first-time buyers enter the property market.
Moreover, the Budget addressed issues related to family welfare, with a significant overhaul planned for the high-income child benefit charge. Recognizing the unfair penalty on higher-earning parents, the Chancellor announced that the threshold for the charge would rise to £60,000, freeing 170,000 families from the charge and aiming to benefit nearly half a million families with an average increase of £1,260 in the upcoming tax year. Additionally, plans include a shift to a household-based income system by April 2026 to create a fairer approach to this benefit. Alongside these changes, the government will also increase hourly funding rates for early-years providers and allocate £105 million for new special free schools to support children with special educational needs and disabilities.
While these announcements have been welcomed by some as steps toward addressing key issues in the housing market and improving family welfare, others view them as lacking comprehensive support for first-time buyers and long-term solutions for childcare services.
