Mortgage News
CGT will help landlords, says Paragon
Suggestions that the coalition Government will introduce Capital Gains Tax (CGT) taper relief could boost the private rented sector, depending on the assets targeted, said Paragon.
The coalition Government could taper the rate from profits on shares, second homes and other assets according to length of ownership, a key concession aimed at seeing off a revolt from Conservative MPs over plans to raise CGT in line with income tax.
Despite the Institute for Fiscal Studies branding taper relief as a “dreadful idea” that
would create “undesirable economic effects”, Paragon managing director John Heron disagreed. He said it could help the private rented sector, improving investment, the quality and range of properties on offer and lessening speculative activity.
Heron said: “We can anticipate the Government will look at improving the revenue raised from CGT and that’s a reasonable objective. But it is also reasonable that the structure of CGT encourages the long-term holding of assets, because it’s good for the economy and the country.
“I would want to see any change of structure focused on speculative assets held in the short-term rather than long-term assets including rental properties. Taper relief has been used previously, but the devil is in the detail.”
He added: “The whole issue is which assets are worthy of taper relief. The Treasury will certainly be giving this thought.”
Episode 6: What’s next for the industry? : Powered by Partnership podcast from Newcastle for Intermediaries
Sponsored by Newcastle for Intermediaries