The emergency Budget confirmed that CGT would rise to 28% for higher rate taxpayers, far below the feared 40%, while low and middle-income earners will continue to pay 18%. The immediate rise also staved off a mass buy-to-let property sell-off by investors attempting to avoid the tax.
David Brown, commercial director of LSL Property Services, said its research showed that a quarter of property investors will be deterred from investing further.
He added: “A more balanced CGT regime will deter speculative property investment. Experienced landlords know they need a good yield to sustain their investment portfolio. This move should help reinforce the importance of that approach.”
Ray Boulger, senior technical manager for Towergate-owned John Charcol, said: “I do not think that increasing the CGT rate for higher rate taxpayers will have too big an effect on the buy-to-let market.
“The fact that the £10,100 annual exemption has not been reduced and its current indexation will continue means amateur landlords will still be able to mitigate their tax liability by selling one property a year.”
