The Autumn Budget has been unveiled, and while it didn’t bring any major surprises for housing or mortgages, it’s clear there are significant changes ahead for property owners, investors, and those navigating the mortgage market. If you’re a contractor, here’s a breakdown of the key announcements and how they might affect you.

Stamp Duty Land Tax (SDLT): Higher rates for second homes and investment properties

One of the major updates is an increase in Stamp Duty for second homes and investment properties.

The additional SDLT surcharge has risen by two per cent, bringing the lower band surcharge from three per cent to five per cent.

This increase will likely apply across all SDLT bands, although the Government’s documents are still being clarified. What this means for contractors looking to invest in property is straightforward: higher upfront costs when purchasing a second home or buy-to-let property.

Capital Gains Tax (CGT): Frozen for property, but increased for shares

The good news for property investors is that CGT rates on second homes and investment properties have not increased. However, for contractors with diversified portfolios, there are changes to note.

CGT on shares and other non-property assets has risen:

• Lower rate: from 10 per cent to 18 per cent
• Higher rate: from 20 per cent to 24 per cent

If you’re considering selling shares or other assets, it’s essential to factor in these higher rates and the potential impact on your tax bill.

First-time buyers and Stamp Duty relief

Unfortunately, there was no extension to the Stamp Duty relief freeze for first-time buyers, which means current reliefs will end in April 2025.

From that point, first-time buyers will pay Stamp Duty at the same rates as other buyers.

If you’re a contractor saving for your first home, the next year offers a window of opportunity to take advantage of the existing reliefs before they expire.

A boost for homebuilding and social housing

The Budget allocated £3.1 billion to new-home construction, with an additional £3bn to support smaller developers and builders.

For contractors in the construction or development sectors, these investments could mean new opportunities in housing projects, particularly in areas like Liverpool and Cambridge, where funding has been confirmed.

Mortgage rates and borrowing costs

In the immediate aftermath of the Budget, swap rates – which influence lenders’ mortgage rates – have risen.

Combined with global economic pressures and potential increases in borrowing costs, this could put downward pressure on hopes for further mortgage rate cuts.

If you’re considering a remortgage or purchasing property, now may be a good time to lock in current rates before any further increases take hold.

What does this mean for contractors?

The Autumn Budget has created a mix of challenges and opportunities for contractors:

• Higher costs for property investment due to increased SDLT rates
• Opportunities in new housing projects and smaller development schemes
• Changes to tax planning, particularly for those with diversified portfolios

The property market is always subject to change, but with careful planning, contractors can still make the most of their opportunities.