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Treasury says it wants 'landlords to quit sector'

buy to let hunt chancellor

The Government wants more private landlords to sell their properties and exit the market, commentary within Jeremy Hunt’s Spring Statement briefing document has revealed.

Buried within the Treasury background notes published yesterday after the Chancellor’s speech in parliament, it explains why the reduction in the higher rate of Capital Gains Tax (CGT) for residential property disposals has been cut from 28% to 24%.

While some landlords might assume the reduction is a small peace offering to landlords who have faced huge increases in the tax they pay each year following the phased withdrawal of mortgage interest relief, the document reveals the Treasury instead wants so to see more landlords selling their properties.

“This [CGT change] will encourage landlords and second home-owners to sell their properties, making more available for a variety of buyers including those looking to get on the housing ladder for the first time, while also raising revenue over the forecast period,” it says.

“The lower rate will remain at 18% for any gains that fall within an individual’s basic rate band.”

The commentary will reinforce the belief among many landlords that the Tories would prefer the private rented sector shrank significantly.

Amy Reynolds (pictured) of Richmond, London estate agency Anthony Roberts, says: “While the capital gains tax reduction might encourage some landlords to sell, it could also exacerbate the shortage of rental properties we are seeing, leaving tenants in a difficult position, especially those already facing high rents”.

But Nicky Stevenson, CEO of Fine & Country, welcomed the CGT change, saying it would help boost supply in the sales market: “Teetering landlords unsure about whether to take the plunge and sell their property will be encouraged by this announcement.

“This should offer hope for first-time buyers who are the foundation of the property market but have been hit particularly hard by high interest rates.”


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