Increase in landlords planning to purchase
LANDLORD Assist, the nationwide tenant eviction and rent collection firm, believes the buy to let sector will continue to be a sound investment despite landlords being presented with a 10 per cent increase in Capital Gains Tax (CGT) in last week’s Emergency Budget.
The rate at which tax is charged on non-business assets has now increased from 18 to 28 per cent for higher earners, but not to the 40 per cent or 50 per cent that had been widely predicted.
Many landlords feared that a sharper rise in CGT would deter new landlords from entering the buy to let sector and affect the future supply of rented housing, especially at a time when the UK is experiencing a housing shortage.
But Graham Kinnear, managing director of Landlord Assist, believes that, with the increase not as bad as first thought, property investment will remain a sound financial proposition.
Mr Kinnear said: “Property investors need to be encouraged to build and grow a portfolio, and a tax system whereby one party takes all the costs and risks and yet the other takes half the profit is clearly unfair. Whilst any rise in CGT is inevitably a blow to landlords, we are delighted that the financial incentive for property investment remains.”
“Landlords tend to enter the buy to let market knowing that property is a long-term investment rather a short-term gain. We do not believe that this rise in CGT will cause too much disruption to the sector.”
Stephen Parry, Commercial Director at Landlord Assist, agrees. He says: “It is widely acknowledged that some tax increases were inevitable given the size of the deficit so we are pleased that these have been moderate to acknowledge the need for investment in the property sector.”
Landlord Assist provide free, no obligation advice to landlords and letting agents throughout the UK on all landlord and tenant matters. They can be contacted on 08707 662288 or via their website www.landlordassist. co.uk.