Politicians are thinking about cutting Capital Gains Tax (CGT) for landlords who sell their properties to first-time buyers.
The move would come as part of a package designed to free up properties for younger people. Pensioners would also receive stamp duty incentives to encourage them to downsize.
At the moment, people pay 18% CGT on the profit they make when they sell a property that isn’t their main residence, or 28% for higher rate taxpayers (in England and Wales, those with earnings of over £50,270 this tax year). Politicians have not yet said how big the discount would be under the proposal.
Landlords may appreciate the tax break, but creating new incentives to sell up could worsen the private rented sector’s growing property shortage. Industry group Propertymark has warned that landlords are already quitting due to tax and legislative changes, and that the homes they sell aren’t being relet by new landlords. Analysts have pointed to that selloff as one of the reasons the government’s CGT receipts hit record highs last year.
At the moment the tax cut is only an early-stage proposal. Conservative backbenchers are calling for lower taxes on property buyers and sellers, although to date they have mostly focused on stamp duty. Any overhaul of property transaction taxes would have a huge impact on the UK housing market, and buyers and sellers of all backgrounds will be waiting to see what happens next.
Other housing policy headlines
Boris Johnson sets out plan for benefit claimants to get mortgages – BBC
Social housing landlords to face Ofsted-style inspections – Mortgage Solutions
PM unveils mortgage and benefits review to boost homeownership – Estate Agent Today
