At Stones Residential, we know you have a lot of information to consider right now, especially when it comes to the property and lettings market.
The end of the financial year, and the Budget always creates talking points.
If you feel as though you need a helping hand to stay up to date with what is happening, or you need guidance, we can help.
We are pleased to connect with buyers and vendors in and around Belsize Park. This is an exciting part of the capital, and it is as welcoming to the lettings market, as it is for the property market.
We work closely with many landlords, and if you need guidance on Capital Gains Tax (CGT), we are here for you.
Will CGT impact you?
Possible changes to Capital Gains Tax have concerned many landlords.
The survey of 1,100 landlords carried out by Find Out Now (10th February 2021 asked the question; “Are you worried that Capital Gains Tax will be increased in the March budget?”
52% of respondents said NO, with 48% of respondents answering YES.
The survey also asked; “Are you planning to sell your buy-to-let portfolio before a potential increase in Capital Gains Tax?”
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57% of respondents said; “I will stick with my investment”
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23% of respondents said “I will wait and see what is announced”
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13% of respondents said “I am considering selling”
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8% of respondents said “Yes, I am currently selling”
What might change with CGT?
If the recommendations made by the Office of Tax Simplification is followed, higher rate tax payers who sell a buy-to-let property (or an additional home) would see their CGT bills rise from 28% to 40%. This would be costly for many landlords.
For landlords on the basic rate of tax, there would be an increase from 18% to 20%. This is not as significant a rise, but anything which costs people money is rarely welcome.
The Office for Tax Simplification has also recommended a significant reduction in the Annual Tax Allowance. This currently stands at £12,300; but it could be reduced to £2,000.
Overall, the recommendation is for CGT to come into align with income tax rates, and this could see it rise to 45%.
James Forrester, a known name in the UK property market, commented: “Buy-to-landlords have been hit hard by the government in the past few years, and now they have something new to worry about. They’ve already had to cope with the 3% stamp duty surcharge, as well as a reduction in mortgage income tax relief, so perhaps landlords are numb to this latest nail in the coffin, although it remains a worry for nearly half. The changes would likely result in landlords prioritising annual income from their investments rather than capital growth, which could see investors target regions of the country with high rents compared to house prices.”
If you would like to arrange an appointment to help you negotiate the local housing market, please contact Stones Residential today by calling us on 020 7483 0685 or emailing belsizepark@stonesresidential.co.uk.
