CGT 'devastating' to landlords

An increase in capital gains tax (CGT) would be "devastating", according to Alan Ward, chairman of the Residential Landlords Association (RLA).

If it is applied as a flat tax it will kill the market, he said, as well as affecting renovation and the general standard of properties.

"George Osborne has got to be absolutely clear of the effect that putting up capital gains tax at this level will have," he remarked.

Mr Ward's comments come after research by Kensington found that the private rental sector is increasing as more people are waiting to buy property or cannot afford it.

As a solution to the situation, the expert suggested that the chancellor could "reinstate taper relief to encourage landlords to retain the property for longer" or he could "provide roll-over tax relief so that when a landlord sells one property, and uses the capital gains from that to reinvest and put it into another property, then it is not subject to capital gains tax".

Mr Osborne will announce the CGT rise on June 22nd in his Budget.

Posted by Christopher Evans

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Published on: June 15, 2010

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