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Budget 2010: Immediate CGT rise negates mass property sell-off

  • 22/06/2010
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Budget 2010: Immediate CGT rise negates mass property sell-off
A mass sell-off of property by landlords trying to escape the increase in Capital Gains Tax (CGT) has been averted after Chancellor George Osborne announced in the emergency Budget a rise to 28% would take effect from midnight tonight.

Higher rate taxpayers will see an immediate 10% increase in CGT from 18%, far less than the 40% that many predicted would be introduced from April next year.

The introduction from midnight tonight will stop any pre-emptive move by landlords who wished to sell off their investment portfolio before the CGT rise came in.

The Chancellor said that the coalition Government has explored the possibility of increasing CGT above 28%, but that such a move would have created fewer returns.

He added that he had considered introducing taper relief, but that to do so would make the system to complex to administer and would have been “self-defeating”.

Stuart Law, chief executive of Assetz, said: “Osborne’s CGT increase to 28% remains lower than the rates we had three years ago, of up to 40%, before Labour introduced the 18% rate.

“This move is not likely to have a negative impact on the UK property market as speculative investors are unlikely to sell off their buy-to-let property once this new tax rate is introduced at midnight tonight. Professional property investors are generally looking at the long-term benefits and see the importance of the regular income rather than short -term capital gains.”

To read the full speech, click here

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