Property Investors Welcome 28% CGT Increase
Since the leak a couple of weeks ago about the possibility of capital gains taxes rising to as much as 40%, there has been a lot of speculation about whether or not the government would put this tax increase into effect. Fortunately, the Emergency Budget yesterday has removed this fear after the Chancellor revealed that CGT’s would only be increased to a maximum of 28%.
Under their new ruling, capital gains will remain at 18% for low-middle income earners, and will only rise to pay 28% when a property investors profits exceeds their personal income tax.
And so far this news has been received positively by property investors, advisors and developers alike across the market…
Implemented as of 12:01am this morning, the government has chosen to implement this change quickly to prevent property owners with 2nd homes from trying to jump onto the property market and sell in order to escape this tax increase. By acting now, this will prevent a flood of properties from coming onto the property market when the reality is buyer interest has been dropping.
But property investors are not the only niche to see ‘gentler’ tax changes.
Property investors with furnished holiday homes have also been saved from these tax increases, instead being allowed to remain under the rules for business assets where they will only be taxed 10%.
Yet despite this evident positivity from property investors, many property developers are disappointed over the lack of clarity from the government over how much affordable housing grants will be cut.
Similarly, property website Rightmove has expressed concerns over the long term implications of these capital gains tax increases. Even at 28%, they are worried that this 10% tax hike will dampen enthusiasm for property investment from buy to let investors and will make buy to let less accessible to first time buyers as rental prices rise to compensate.
Related posts:
- New measures could increase opportunities for developers and investors
- Will Property Landlords Receive CGT Exemptions?
- New Initiative Offers Property Investors Protection Against Squatters
- Some areas see increase of family accommodation for rent
- Off-Plan Investors Face Higher Stamp Duty Rates
Tags: capital gains tax, emergency budget, first time buyers, property developers, property investor, property owners
Leave a Reply