Kevin Hollinrake, the Conservative MP and co-founder of Hunters estate agents, has tabled an amendment to the Finance Bill calling for landlords to be charged a reduced rate of capital gains tax (CGT) if they sell a property to a sitting tenant.
Earlier this year, the MP spoke out in favour of buy-to-let landlords by insisting that they should never have been denied a tax break on their property profits after the now former chancellor George Osborne excluded them from a significant CGT cut in his Budget statement.
Landlords continue to be stung with a hefty 28% CGT bill when they sell up, a rate that the former chancellor himself described as one of the “highest in the developed world”.
Residential property was deliberately excluded from the tax cut that sees investors in other types of asset benefit from the higher rate of capital gains tax reduced from 28% to 20%, while the basic rate was reduced from 18% to 10%.
Now Hollinrake has tabled an amendment to Clause 72 of the Finance Bill that would extend the new 20% CGT rate to private landlords when they sell their rented property to a sitting tenant.
The motion to put the measure into an amendment to the Finance Bill, which is currently going through parliament, was originally put forward by the Residential Landlords’ Association (RLA) which believes that a growing number of landlords are now thinking about exiting the market as renting becomes financially unsustainable for them.
Research, conducted by the RLA earlier this year, found that 77% of private landlords would consider selling their property to tenants if the tax liability was reduced.
RLA policy director, David Smith, said: “Many landlords are now considering their future in the market following recent tax increases whilst others will be looking to sell as part of the natural churn of properties in the rental market.
“This amendment would help achieve the Government’s aim of encouraging and supporting home ownership for aspiring first time buyers whilst easing some of the excessive tax burdens recently placed on landlords.”
Want to comment on this story? Our focus is on providing a platform for you to share your insights and views and we welcome contributions.
If any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals, then the post may be deleted and the individual immediately banned from posting in future.
Please help us by reporting comments you consider to be unduly offensive so we can review and take action if necessary. Thank you.
.png)
Join the conversation
Jump to latest comment and add your reply
What’s this another cock-up of a proposal of an amendment to the Finance Bill, it should apply to all LL’s who want to sell. I am sure we had enough of so called sitting Tenants, will we ever be treated equally, a level playing giro please.
CGT should be the same.
It benefits no-one apart from the Treasury.
Reducing property taxation will enable more to buy.
LL are definitely in selling mode.
There are just a few more incentives
LL need and then there will be a mass rush by LL to exit the PRS.
Which is apparently what the Govt wants!!
So I say to Govt incentivise existing LL to leave and they will.
S24 isn't working as first thought it would as LL are converting from AST lettings to other forms of letting legal or otherwise.
Please login to comment