Monday, May 17, 2010
The fears of a sell off are rapidly surfacing
Mortgagestrategy: Lawyer warns against selling homes due to CGT hike
Wealth management lawyer Moore Blatch is warning investors not to rush into selling property ahead of the proposed rise in Capital Gains Tax. The government announced plans last week to increase CGT from 18% to 40%. But Moore Blatch says that even with the proposed rise in CGT many investors would be better off holding onto their property, unless they were planning a sale within the next 12 months.
Posted by jack c @ 03:28 PM (1234 views) Add Comment
10 Comments
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1. str 2007 said...
Yes I suspect this is the view most will have - innit for the long term.
Move along, no crash here.
2. hpwatcher said...
Yes, str 2007 - he knows that if lots of people do sell, house prices will drop and he will lose money.
High house prices are absolutely crucial to the UK economy.
3. alan_540 said...
Are we there yet?
4. Catmandu said...
And if house prices increase by 50% over the next year, the gains from holding on to your house will be higher than the capital gains tax.
And if house prices increase by 100% over the next year, the gains from holding on to your house will be even higher than the capital gains tax.
Can't believe the nonsense in this article.
5. techieman said...
"Moore Blatch cites Land Registry data which shows that prices have risen 7.5% over the last 12 months.
If this trend continues, the lawyer says investors could be financially worse off if they sold now rather than in a year’s time, despite the doubling in the rate of tax.
For example, an investor selling a £200,000 property now with a capital gain of £50,000 would be liable for £7,182 CGT at 18%, taking into account the personal allowance. The net worth of the property would then be £192,818.
But if property prices increased a further 7.5% over the next 12 months, the property would be worth £215,000 and the gain would be £65,000 liable for £21,960 of CGT at 40% after the personal allowance had been deducted. The net worth of the property would therefore be £193,040 – more than it would have been the year before."
If my nan had wheels she would be a car!!!!
6. techieman said...
...or 193,040 v 192,818 =a 222 gain or a 0.115% gain...... erm thanks Mr Wealth management lawyer.... and then what about costs (extra maintenance costs for a year etc etc ?).
Wealth management? those werent the first two words that sprung to my mind.
7. jack c said...
I had a good chuckle when I read the figures - the usual property prices only go up theory. How about prices correct down by say 35-50% and very few will have to worry about capital gains (more like offsetting capital losses)
8. paul said...
The smell of fear ...
9. Watchman said...
More like the smell of normality... I'm awaiting the fear with a smile on my face ;-)
10. watchman said...
More like the smell of normality... I'm awaiting the fear with a smile on my face ;-)