The UK coalition government?s proposed capital gains tax (CGT) hike has sparked considerable reaction from buy-to-let landlords. Many are making an effort to offload their properties as soon as possible, before the hike comes into effect.
The proposed tax rise will be from 18 per cent to 40 per cent, or even as much as 50 per cent, to be announced with the new government?s first budget on 22 June.
It is projected that this increase will potentially affect the profit that property investors can make on sales. Estate agents have experienced a deluge of calls from landlords asking for advice and putting their property on the market as fast as they can.
James Hyman, a partner at Cluttons estate agents, told The Guardian: ?There has been a noticeable level of increase in the number of landlords coming to us to ask about selling their buy-to-let properties, with some choosing to actually put them on the market to try to avoid the potential CGT liability.? Upmarket estate agent Savills also reported an increase in calls from landlords ? especially those in London.
The tax changes would signficantly affect landlords who choose to sell their property after implementation.
A landlord who for example bought a property for ?100,000 and now sells for ?200,000, will make a net gain of ?182,000 with the current 18 per cent CGT. With 40 per cent CGT, however, the net gain for the same property would sink to ?160,000.
Amid much speculation, The Guardian has reported that the most likely date for implementation is on the day of the budget announcement, 22 June.
