What does the Autumn Budget mean for the real estate sector?

The much awaited Budget produced some mixed news on the commercial real estate front. Whilst there was lots of talk around how to make savings and where the money will come from to fund the proposals in the budget, there was also news on spending and investment including investment in 11 new Green Hydrogen Projects and £500m increase for road maintenance.

The other main takeaways on the real estate front were:

Capital Gains Tax

The chancellor announced an increase in the lower rate of Capital Gains Tax from 10% to 18% and the higher rate of Capital Gains Tax from 20% to 24%. She also announced that the government would be keeping the rates on residential property at 18% and 24%

Capital Gains Tax rates for Business Asset Disposal Relief and Investors’ Relief will rise gradually from 10% to 14% from 6 April 2025 and match the main lower rate of 18% from 6 April 2026.

Inheritance Tax – Agricultural and Business Property

Agricultural property relief and business property relief will be maintained at 100% relief for the first £1m of combined assets from 6 April 2026 and 50% relief thereafter.

Enterprise Investment Scheme and Venture Capital Trust

The Chancellor announced that the government is extending the Enterprise Investment Scheme and Venture Capital Trust schemes to 2035, committing over £250 million in funding in 2025‑26 for the British Business Bank’s small business loans programmes.

Business rates

The Chancellor announced £1.9 billion support for small business on the high street by freezing the small business multiplier and that the current 75% discount applied to business rates (due to expire in April 2025) for retail, hospitality and leisure small businesses will be replaced with a 40% relief up to a maximum cash cap of £110k.

The Chancellor announced that business rates charitable relief for private schools will be  removed.

SDLT

Higher Rate Threshold for SDLT on residential properties (a surcharge rate payable on the purchase of second homes, purchases by non-UK residents or the purchase of a residential dwelling by a company) will increase from 3% to 5% at midnight today.

The single rate of SDLT that is charged on the purchase of dwellings costing more than £500,000 by corporate bodies will also be increased by from 15% to 17%.

The increased SDLT first time buyers allowance was not extended, and will return to £300,000 in April 2025, down from the current £425,000.

For house movers, the 0% threshold will return to £125,000 from £250,000 in April 2025, as anticipated.

Development and Housing

The government is adding £500 million to the Affordable Homes Programme to build up to 5,000 additional affordable homes committing to the government’s path to build 1.5 million homes over this parliament.

A consultation on a new long‑term social housing rent settlement of CPI+1% for 5 years will offer long‑term certainty for social housing providers.

The Chancellor announced that the Government will be reducing discounts on the Right to Buy scheme and enabling councils in England to keep all the receipts generated by sales.

£3 billion of additional support for SMEs and the Build to Rent sector, in the form of housing guarantee schemes, to support the private housing market.

It was announced that the government will provide £46 million of additional funding to support recruitment and training of 300 graduates and apprentices into local planning authorities, accelerate large sites that are stuck in the system, and boost and upskill local planning authority capacity to deliver the government’s wider reform agenda.

The Budget also confirms £47 million of funding to support the delivery of up to 28,000 homes that would otherwise be stalled due to nutrient neutrality in affected catchments.

There was also mention about mortgage guarantee schemes being made permanently available to supported lending at 95% and investing in and speeding up remediation of social housing after the Grenfell Tower fire.

Overall a mixed bag on the real estate front. Those in the buy to let industry looking to invest and public schools having been hit hard.