Chancellor Rachel Reeves’ Budget statement this afternoon highlighted tax hikes for both working individuals and British businesses.

She told the Commons that the Budget will raise taxes by £40bn with an approach that she believes will achieve growth in the near future.

National Insurance

There was bad news for employers, as Reeves announced that National Insurance contributions by employers will rise from 13.8% to 15%.

In addition, the threshold at which businesses start paying National Insurance on a workers’ earnings will be lowered from £9,100 to £5,000.

Capital gains 

The rates on residential property will remain at 18% and 24%.

Inheritance Tax 

Reeves said she will extend the inheritance tax threshold freeze for a further two years to 2030.

That means the first £325,000 of any estate can be inherited tax-free, rising to £500,000 if the estate includes a residence passed to direct descendants, and £1m when a tax free allowance is passed to a surviving spouse or civil partner, she said.

She added that she will bring inherited pensions into inheritance tax from April 2027.

Stamp duty

Property professionals react to the statement:

Antony Lark, Spicerhaart joint CEO, commented: “The Budget has been a mixed bag for our sector, with the chancellor giving with one hand and taking with the other. On the one hand, the government’s commitment to increasing housebuilding brings potential growth to the property market, increasing transactions and revenue.

“But on the other hand, landlords are being clobbered by a 2% increase in the stamp duty surcharge on additional homes, which could impact investor confidence in second homes and buy-to-let, despite the absence of any increase in CGT on residential properties.

“It’s also disappointing to see no mention of changes scheduled for Stamp Duty next year which will see thresholds lowered, making things even more difficult for people looking to purchase a home.

“Estate agents are also going to be impacted by higher running costs, with the threshold of employers’ National Insurance (NI) contributions reducing from £9,100 to £5,000, which will put a huge strain on estate agencies, particularly smaller firms that are already cash strapped, which could also result in job losses.”

Nick Leeming, chairman of Jackson-Stops, said: “Today’s Budget misses a key opportunity for broader stamp duty reform—a sentiment shared by one in four people across the UK, and by a third of those aged 65 and over. A targeted downsizing incentive would have been a forward-thinking approach, encouraging older homeowners to move to smaller homes without incurring high tax burdens. This would help free up family-sized properties for growing households and create a more balanced housing market.

“With one in three people over 65 calling for change to this burdensome tax, it’s clear that today’s Budget could have gone further to address the broader needs of the housing market and to create a more fluid property chain.”

“We do however welcome the chancellor’s decision to leave CGT on residential property and buy-to-let properties unchanged. With supply already tight across the rental market, increasing CGT would have likely discouraged landlords from maintaining or expanding their portfolios, adding further upward pressure to rental prices and impacting affordability for renters.”

“We also welcome the government’s recognition of the critical role of the ‘bank of mum and dad’ in helping younger generations onto the housing ladder through the extension of the frozen inheritance tax threshold to 2030. With increased tax burdens potentially limiting the ability of families to support their children in homeownership, the government must continue to consider how it can best support prospective homeowners through meaningful housing strategy.”

Lucian Cook, head of residential research at Savills, said: “Any relief buy-to-let landlords and second homeowners may have felt from seeing their exposure to Capital Gains Tax unchanged will have been very short-lived given an increase in the SDLT surcharge.

“The risk is that it further constrains the supply of private rented accommodation, keeping upward pressure on rents. New buy-to-let investors will be very thin on the ground, and even existing larger, wealthier, landlords, will think very carefully about whether they continue investing.

“That means there will be a thinner seam of demand and fewer options for those looking to exit the sector.”

Nick Sanderson, Audley Group CEO commented: “Planning policy will continue to haunt the government if it ignores the need for reform. Labour’s ‘golden rules’ and commitments to planning reform were a step in the right direction at the beginning of its tenure but now we need more detail. There must be a clear commitment to the types of home that will be built, and how the planning system will help meet those targets, rather than hinder. More planning officers is a start, but a progressive and forward-thinking government would prioritise the delivery of age-specific properties across the UK. The benefits would be vast; creating space in the housing market, enabling people to live healthy lives for longer, alleviating pressure on the NHS and ultimately improving the quality of life for our ageing population.”

Angharad Truman, ARLA Propertymark president, said: “We continue to see a growing disparity in the number of private rented homes available against a backdrop of increasing demand from tenants. Therefore, it is disappointing to see that the UK Government did not address this fundamental issue in its Autumn Budget and instead has announced yet another blow for landlords by increasing Stamp Duty on Second Homes.

“The private rented sector plays a crucial role in housing the nation with over 4.6 million homes in England alone, therefore it is imperative that the UK Government does not continue to push landlords out of the market.

“In order to ultimately keep people in much needed and affordable private rented homes, we continue to stress the importance of support for the private rented sector including incentives for landlords to invest rather than continuing to penalise them through regulatory bombardment and increasing costs.”

Jon Byers, founder of Anderson Rose, remarked: “Speculation around the Autumn Statement has been swirling since the first day Labour took control of Parliament, with rumours and leaks around various wealth taxes spooking the market and taking out any short-lived momentum achieved since the General Election result was announced. We understand measures need to be taken to fund the Government’s public spending plans, however, there needs to be a greater focus on the property industry, as a busy and prosperous market will reap rewards for the Treasury in the long-term.

“We feel one of the hardest blows to take for the prime property market from this Budget is the further SDLT increase of 1% to international purchasers, which means depending on the value and circumstances of the transaction, could result in a maximum rate of 17%. We have already witnessed a sharp drop off in activity from overseas buyers in recent years and despite talk of making Britain an attractive place to invest this will only deter them further.

“Added to this, the capital gains tax increase means less sellers are likely to sell, which could force the price of property (and stamp duty) higher and out of the reach of even more people. If Labour are serious about promoting investment in the UK then they need to encourage a free market and make the property market more accessible not discourage individuals with higher taxes and punitive red tape.”

Ryan Etchells, chief commercial officer at Together, said: “The chancellor’s reduction in the discount allowing tenants to buy their council homes under the Right-to-Buy (RTB) scheme will mean they will have to pay, in most cases, tens of thousands of pounds more to be able to get on the housing ladder.

“The government says this will make the RTB scheme ‘fairer and more sustainable’ but the move seems incredibly unfair, when some people who may have lived in their council homes for years and had planned to make it their own will now be simply locked out of home-ownership for good.

“Together’s own research shows nearly a third want to see housing and planning reforms addressed in the first 12 months of Labour’s government, with 12% wanting more help for first-time buyers and 7% keen to see the creation of new property schemes to help assist people’s property ambitions by January 2025. Disappointingly, the ruling on RTB works directly against the public’s wishes.”

Joshua Elash, chief executive officer of lender MT Finance Group, said: “In the short term, the increases to NI employers’ contributions may have a negative impact on wage growth and may lead to a slower labour market but we expect this higher rate to be quickly normalised.

“Equally, the increases to capital gains taxes aren’t as aggressive as mooted and at the new levels will not dampen any serious private equity activity.  We don’t see asset holders across any sector sitting tight for an extended period, or relocating, at the new tax levels.

Nicky Stevenson, MD at Fine & Country, added: “Today’s budget gave a mixed outlook for the property market, with second-home owners feeling the full force of these tax rises.

“We had hoped to avoid increases in property-related taxes that could slow market growth. With the upcoming rise in capital gains tax, landlords of investment properties will now face critical decisions about whether to sell. Fortunately, this increase does not extend to residential properties, which provides some relief for homeowners.

“Labour’s announcement also brings another significant blow to homeowners with multiple properties, as the stamp duty charge for second homes is set to rise from 3% to 5% from tomorrow. This increase is bound to reshape decision-making for current and prospective sellers in this bracket.

“These tax changes could potentially lead to a slowdown in property sales as owners now have to weigh up the cost of selling against reduced returns.

“Meanwhile, Labour’s abolition of the non-dom tax regime will bring further changes to the property market. This move will end the longstanding tax benefit for UK residents with permanent homes outside of the country who currently avoid tax on their foreign income.

“The removal of this regime could reduce demand for high-end properties often favoured by foreign investors. Reduced interest from wealthy international buyers may lead to a softening in prices at the luxury end of the market.

“Today’s budget has spared first-time buyers, however, with the government explicitly focusing on wealthier, older demographics. This approach aims to shield younger buyers and those entering the property market from further financial hurdles, especially given the persistent pressures of high housing costs and elevated mortgage rates.”