A rental portal has calculated that some landlords will be obliged to pay up to £54,000 in Capital Gains Tax from April 2014.
Currently the last three years of a rented property’s capital growth is exempt from tax when the property is sold, so long as the landlord once lived in it. But after April this exemption period will be halved to just 18 months.
The extra tax landlords will have to pay depends on the increase in value of the property and the time they spent living in it, but portal Rentonomy.com warns these changes would particularly affect high-rent locations such as London.
“In Kensington prices have risen by 171 per cent in the last decade, meaning that come April a seller would have to pay an extra £54,000 in capital gains tax per property” according to the portal’s research director, David Butler.
The measure, introduced by Chancellor George Osborne in last month’s Autumn Statement, was widely regarded as an ‘oligarch tax’ aimed to hit high-end overseas owners. But it effects small-scale investors and ‘accidential landlords’ who may have rented out their homes during the downturn.
Independent analysts say the government should secure an extra £360m between 2015 and 2019 from landlords who sell up.
%20-%20IMAGE%20Client%20Accounting%20%E2%80%93%20what%20are%20your%20options.jpg)
Comments
MCS - I repeat my question. What has UKIP got to do with Stonehenge's comment or the original article?
Have UKIP made a policy statement that they will give landlords more tax breaks?
@ SteveFromLeicester on 2014-01-31 16:43:54
The point of UKIP is that they are the only ones that could provide MPs or Councillors, however few, to give the current lot a hefty kick up the proverbial over anything. Unless we are all lemmings?
Stonehenge - and your point is . . . what, exactly? And what has UKIP got to do with it?
I have a property that my wife and me lived in for over 20 years until last July.
We raised a 2 years fixed rate interest only BTL mortgage and was intending to sell before July 2016 anyway.
We will be penalised by the lender if we sell before July 2015, and might therefore incur CGT if we sell after then, but only if South Leicestershire prices rise a lot which doesn't seem too likely.
Our personal allowances though might be enough to avoid the tax. Time will tell.
I'm voting UKIP
LAT: What about this 'burden' being brought up by you on this site for comment? It is being debated by politicians today.
If passed it will cause massive problems for landlords.
'Compel landlords to check whether tenants are in the UK illegally, with those failing to do so facing large fines'
As a landlord with a modest portfolio of investment properties I will be disadvantaged by this.
But . . . .
Us landlords (whether we be seasoned investors or accidental landlords) can't have it both ways. We get tax relief on our mortgage interest on the basis that the property and the income generated from it constitutes a business. We can't suddenly change our minds and say its our own home when it comes to selling it.
Even though I'm disadvantaged by it I think its absolutely right that this loophole is being closed.