Sunday, May 16, 2010
Higher CGT a Boon to FTBs as a Sell Off is Likely Prompted
City Wire: Landlords’ losses could be first time buyers’ gains
One man’s meat is another man’s poison and whilst buy-to-let investors will be looking anxiously at the proposals to tax capital gains at anything up to 50%, first time buyers should see an opportunity to get on to the home owning ladder at a reasonable price.
Posted by mick rupert @ 10:11 PM (721 views) Add Comment
5 Comments
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2. paul said...
@mick rupert
Welcome to housepricecrash.co.uk!
Thanks for erm ... saving us the time and effort of clicking on the link to read the story. Intersting that Stuart Law from Arssetz doesn't have any positive spin on this.
Goodee!
3. mark wadsworth said...
What is the big deal with having CGT at people's normal tax rate of 20% or 40%?
This was what we had for decades (with reduced rates for sales of a business), it was only in late 2007 that The Badger announced the rate would go down to 18% for all assets from April 2008 onwards in a desperate attempt to discourage BTLers and second home owners from flooding the market, and, in the longer term, to make BTL and second homes more attractive as an "investment".
So The Tories have turned back the clock two years, so what? Any BTLer or second home owner who bought hsi property more than two years ago is no worse off than when he started.
(Obviously, CGT is, taken in isolation, a Very Bad Tax, just like IHT or Stamp Duty Land Tax, and the better way forward would be to scrap some or all of those and just have council tax bands going all the way up to Z or to have land value tax, separate topic).
4. uncle tom said...
The govt needs to find ways of raising cash that do not have adverse effects on employment, and that puts non-commercial CGT very much in the firing line. The LibDem's manifesto wanted action to restrict second homes; and while their suggested vehicle was the planning process, they would probably support increased CGT as being consistant with their concern.
The prospect of increased CGT in next month's budget won't provoke a sudden huge sell-off of BTL property because there isn't time to complete the process; but people who are buying at the moment maybe be able to extract some good deals from vendors who are at the end of the chain.
Going forward, BTL landlords would actually be discouraged from selling, if a heavy CGT bill was in prospect; and many would hold out in the hope that the tax would eventually be reduced.
The significant aspect is that raised CGT could greatly spoil the attraction of property as a speculative investment, and it is therefore to be welcomed.
5. peter rocker said...
There are quite a few ways to reduce or avoid CGT on buy-to let properties. There is even a £40,000 CGT allowance which can be used, which can be doubled-up for properties held jointly!
Let's hope the Lib Dems in the coalition call for a scrapping of all this rubbish and we get tax on second home sales at a full and high rate.
See http://www.lawpack.co.uk/Knowledge/Property/BuyingAndSelling/article885.asp
for details on the cgt avoidance schemes.