CGT hiked to 28%

In the Emergency Budget, Chancellor George Osborne confirmed that capital gains tax would rise from 18% to 28%. This rate only applies to higher rate tax payers and is not as high as the rumoured 40%.

Anthony Ruane, partner at Optima Legal, believes the move is unlikely to have a negative impact on the property sector. He said: “Only three years ago the previous government taxed up to 40% and in the light of that the proposed rate does not seem excessive in these austere times. Professional property investors tend to consider the longer term investment benefit combined with the receipt of regular income and as such I do not think the increase will have a great effect. In fact the affordability gap for home ownership is likely to worsen over the next few years with an increasing demand for rented accommodation as the likely result.”

Phil Calderbank, director of www.lettingsearch.co.uk, a lettings-only portal, commented: “Although landlords make returns from renting out their property, many place the greatest importance on the capital gains. Although some landlords will be affected by this, we are hoping that the majority will not be put off and will continue to invest in the buy-to-let market and continue to play a major part in the property market’s recovery.”

Kevin Wilkes, managing director of the Worldwide Property Group, said: “I welcome the move to leave CGT unchanged for those people in lower tax brackets which will result in many being untouched by this rise. Property investment offers an exceptional route to greater financial independence for many people, and sensible investors will have factored changes such as this increase into their investment strategies.”