The Chancellor George Osborne announced in his Budget that he would let other property owners pay any CGT on profits they had made from homes at a lower rate of 10% and higher rate of 20% while leaving the rates at 18% and 28% for landlords.
The Finance Act triggering the CGT reform goes to committee stage at Westminster before the end of the month.
Osborne’s master plan for taxing landlords to within an inch of their life is now revealed.
He has a triple whammy aimed at clawing more money from landlords at every stage of property investment:
- Buying a home to rent attracts a 3% Stamp Duty surcharge for private landlords, which places a barrier to entry across the market for new landlords and makes extending portfolios more expensive for professional landlords
- Owning a home, landlords paying income tax at 40% or higher will lose 50% of their finance interest relief and their wear and tear allowance based on 10% of net rents regardless if any money was spent on replacing furniture or equipment. Instead, they will have a 20% tax credit for interest payments and a new replacement allowance that matches spending on furniture and equipment pound for pound
- Selling a home, landlords face paying a higher capital gains tax rate that other property owners.
Taken together, the three tax grabs could add up to a substantial amount of money flowing into the Treasury from buy to let.
If you want to support the judicial review please follow the link to http://www.tenanttax.co.uk/