March 19, 2024
2 mins read

Hunt hits landlords with stealth capital gains tax raid

Almost nine in 10 higher-rate paying landlords will also be liable for a larger tax bill, with an extra liability of £454…reports Asian Lite News

Jeremy Hunt’s stealth tax raid on landlords is set to leave property owners paying hundreds of pounds more when they sell up, according to analysis from estate agency Hamptons.

The Chancellor announced a cut to the higher rate of capital gains tax (CGT) in the Budget, from 28pc to 24pc, but for most landlords the benefit will be outweighed by a reduction in tax-free allowances, a decision made in the Autumn Statement of 2022.

The annual capital gains personal allowance was cut from £12,300 last year to £6,000 this financial year and £3,000 in 2024-25.

It means the value of an investment property must rise by just £3,000 for a landlord to incur a tax liability when they sell and effectively means most will end up paying more to the state.

All lower-rate tax paying landlords will pay extra capital gains tax on property sales, Hamptons said, with an average extra bill of £1,674 compared to what they would have faced two years ago.

Almost nine in 10 higher-rate paying landlords will also be liable for a larger tax bill, with an extra liability of £454.

Aneisha Beveridge at Hamptons said those whose investments accrue the smallest gains will suffer the biggest proportionate hit. She said: “Recent changes to CGT will hit landlords making the smallest gains hardest. Typically, these will be newer millennial investors who have seen less price growth, or those selling cheaper homes in less expensive parts of the country. Meanwhile, older investors who’ve been landlords for longer and have accumulated bigger gains are much more likely to benefit from the tax cut.”

Announcing the change, Hunt said he was cutting the higher rate of capital gains tax to stimulate more market activity, ultimately raising more revenue for the Exchequer.

The Chancellor said in his Budget speech: “Both the Treasury and the Office for Budget Responsibility have looked at the costs associated with our current levels of capital gains tax on property. They have concluded that if we reduced the higher 28pc rate that exists for residential property, we would in fact increase revenues because there would be more transactions.”

Hunt said that, along with the dividend allowance, “these changes still leave us with more generous allowances overall than countries like Germany, Ireland, France, and Canada”.

However, Beveridge said: “Although the Chancellor made it clear he was hoping to encourage landlords to sell up and add new housing supply into the market for first-time buyers, the reality is that the capital gains tax changes taken as a whole will likely act as a disincentive.  “Most landlords leaving the market this year will end up paying more tax than two years ago, not less.”

ALSO READ-Afghan judge hunted by Taliban wins case

Previous Story

Badenoch downplays rumours of plot to replace PM

Next Story

‘To have peace, Europe must prepare for war’

Latest from -Top News

Trump tariffs send world markets into panic

US benchmark crude oil shed $2.70 to $64.25 a barrel after major oil producers announced they plan to increase production. Brent crude, the international standard, was down $2.63 at $67.51 a barrel

EU prepares retaliation for Trump’s tariffs

The European Commission is assembling a fresh round of counter-tariffs aimed at US goods, adding to two existing lists of potential targets—one of which includes products that were hit by suspended tariffs

US, EU slam China’s war games near Taiwan

US President Donald Trump underscored the need to maintain peace in the Taiwan Strait, advocating for a diplomatic approach to cross-strait tensions while warning against the use of force The United States

£13.9 billion of R&D fund to boost innovation, jobs

Funding outlined to support transformational R&D in areas like life sciences, green energy, engineering and beyond More UK innovators like those developing treatment-transforming dementia tests or building world-leading testing facilities to power

OPEC+ accelerates oil output hikes

Despite the production boost, the group emphasised that future adjustments remain flexible and could be paused or reversed depending on market conditions. Eight OPEC+ nations have unexpectedly decided to accelerate their oil
Go toTop