Exemption of residential property from CGT biggest concern for landlords

  • 14/06/2016
  • 0
Exemption of residential property from CGT biggest concern for landlords
Landlords have named the exemption of residential property from reductions to the rate of Capital Gains Tax (CGT) as their top concern, a survey carried out by Amicus Finance shows.

In March, George Osborne slashed the higher rate of Capital Gains Tax (CGT) from 28% to 20% and cut the basic rate from 18% to 10%, but exempt residential property from these reductions. The Chancellor said at the time that the purpose of this was an “incentive for individuals to invest in companies over property”.

Research conducted by Amicus found that 63% of landlords view this as their biggest challenge in the marketplace.

The second biggest worry, named as the top concern among 61% of landlords, was the abolition of tax relief on mortgage interest, which will be reduced from 45% to 20% over a four-year period from next April.

In third place for concerns over the next 12 months were tax changes to maintenance and improvements, named as an issue by 57% of respondents. These changes mean that landlords will only be able to claim for ‘wear and tear’ costs actually incurred on replacing furnishings when calculating taxable profits.   

John Jenkins, chief executive of Amicus, said the tax landscape has become increasingly hostile for landlords but added that optimism in the market remains.

“Despite the new tax changes, we are seeing a sustained and growing appetite for property finance driven by the inability of some lenders to act sufficiently quickly to respond to demand. We’re anticipating a strong 12 months for the professional buy-to-let market.,” he said.

Some 44% of landlords expressed concern about the impact of EU exit from the European Union, while a further third said they were worried about accessing long-term finance to grow their portfolios.

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