In the previous government’s last Budget, they cut the top rate of CGT from 28% to 24%. At that time, the Office for Budget Responsibility calculated that this would raise nearly £700 million for the Treasury due to boosting property sales leading to an increase in stamp duty collected.
Looking forward to the next Budget, ministers have voiced concerns that raising the CGT rate once more would cost the Treasury money overall because of a resulting slowdown in property sales.
Therefore recent reports suggest that while some types of capital gains tax might be targeted in the Autumn Budget, ministers have decided to leave CGT levied on the sale of second homes and buy-to-let properties unchanged. Instead, the capital gains increases are likely to be targeted at shares and other assets.
In their latest Rental Trends Tracker, Rightmove theorised that some landlords were bracing themselves for a potential capital gains tax rise, so this will be welcome news for many property investors.
Learn more about buy-to-let taxes and other associated costs by taking a look at RWinvest’s guide.