Landlords apprehensive on new tax proposals

It appears that residential landlords may be one of the first victims of the stringent measures the new Conservative Liberal Coalition Government are looking to put in place. It is widely anticipated that a hike in capital gains tax will be implemented in the June budget to pay for the Governments plan to higher the tax entry threshold. Pundits are expecting the level on capital gains to go from the present 18% to possibly as much as 40%, and although the rise in the rate is expected to be tempered by introducing certain allowances residential landlords and second home owners will feel the full weight of the new tax level.

The National Landlords Association has requested the Government  view buy to let landlords as businesses or entrepreneurs which would see them exempt from the new rate, with the chairman of the organisation David Salisbury saying “We are concerned that a tax increase of this nature will act as a barrier to further investment in residential property just at a time when there is an urgent need for more housing,

“There should be further consultation with the industry before drastic changes are made”

Historically, before the Labour Government introduced the flat rate of capital gains tax, landlords who stayed in the private rental sector for long periods saw their rate of capital gains tax lowered from 40% down to 24% as a means of encouragement, the fear now is that the new Government will not recognise this which could result in many buy to let investors will selling properties before the new rates become a reality. For those that choose to stay in the sector achieving savings by seeking out cheap landlord insurance will become more important than ever.

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