Kensington research shows that 46% of intermediaries say capping Capital Gains Tax at 28% is the most important measure to reduce impact on buy-to-let.
George Osborne, Chancellor of the Exchequer announced that higher rate tax payers will pay a flat rate of 28% on capital gains in this afternoon’s emergency budget from midnight tonight. Lower rate tax payers will pay a flat rate of 18%, representing no change from the current status quo.
Kensington says that mortgage intermediaries have said capping CGT at a rate lower than income tax is the most important measure the government could have taken to reduce the impact that higher CGT rates might have on buy-to-let.
The report also said a further 41% of mortgage brokers called for the introduction of taper relief – an option that Osborne acknowledged in his speech but rejected because of the cost and complexity involved.
Just 6% believed he should treat buy-to-let investments as business assets and only 4% thought the best option was to introduce increased CGT rates gradually over a number of years.
Earlier this month Kensington released research saying that nearly two thirds of people living in privately rented accommodation are unlikely to buy their own home by 2015.
Charles Morley, head of sales and product development at Kensington, said: “Our research suggests that the route chosen by Osborne is the most popular of those options among mortgage intermediaries and we are confident that today’s announcement will have minimal, if any, lasting impact on the buy-to-let market.”
“This is important because, with a growing population and difficult outlook for first-time buyers the strain on the private rental sector will only increase and we need to encourage landlords to build and maintain portfolios for the long term so that tenants continue to have a choice of good quality, affordable rental accommodation to meet their housing requirements.”
