Capital gains tax hike could force landlords to sell up
A quarter of landlords claim they are considering quitting the buy-to-let sector ahead of the new Government's planned hike in capital gains tax, a survey shows.
Around 26% of landlords said they were thinking about selling their properties before the tax is increased from its current rate of 18%, according to lettings agency network LSL Property Services.
A further 71% of investment landlords said a rise in the tax would make them reconsider making future investments in property.
Nine out of 10 landlords also said they opposed plans to hike capital gains tax.
The Government signalled its intention to raise capital gains tax in its coalition agreement, when it said it would change the rate paid on non-business capital gains to a level similar to those |applied to income.
This has been interpreted as meaning the tax will be increased from its current rate of 18% to 40% or even 50%.
But the plans, which are expected to be included in this month's emergency Budget, have sparked opposition from right-wing Conservative MPs, with ex-ministers David Davis and John Redwood leading criticism that it could hit entrepreneurs and savers.
Simon Embley, chief executive of LSL Property Services, said: “Foisting a tax hike on property investors will drive many from the housing market — at a time when its recovery is still perilously |fragile.”
The group warned that people who had invested in property instead of a pension would be worst hit, as they were most likely to have held properties for long periods.