News
Capital gains tax rise less than originally feared
23 June 2010
The buy-to-let market received positive news yesterday during the Government’s emergency budget, as the capital gains tax (CGT) increase was not as severe as previously predicted.
CGT has risen from 18% to 28% for higher earners, rather than the 40% or 50% bracket that had been feared in previous weeks. As a result, there is less chance of landlords trying to sell their properties and consequently flooding the market with property.
There had been reports in recent weeks that estate agents had received panicked landlords who were looking to offload properties before the rise took effect, as the 40% figure predicted would have seen a great reduction in the profit made by individuals. Property owners that did rush through sales ahead of the budget are now likely to rue that decision.
To put it into perspective a higher-rate taxpayer who bought an average priced home 10 years ago as an investment, will have to put an extra £7,500 in CGT compared with yesterday.
Source: Guardian
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