As Capital Gains Tax is increased to 28 per-cent for high rate tax payers in the UK, opinion is divided on the effect this will have on the buy-to-let market. Now Rick Flay from Belvoir Sheffield, leading letting agent in Sheffield offers his thoughts on this recent budget announcement.
According to Rick, from Belvoir Sheffield, who specialise in letting out properties in Sheffield, the new rise is a ‘non issue’ for the long term investor.
He said, “The new report has seen Capital Gains Tax increase to 28 per-cent, but it was heavily trailed in advance, leaving little or no surprise for investors when it was ‘officially announced’.
“In reality this rise really is a ‘none issue’ for the housing market, despite initial fears that it would spark a sudden sell off of second homes and investment properties, because the new rate came into force within hours of Chancellor George Osborne’s announcement.
Briefing the Cabinet on what he called a ‘tough but fair’ emergency Budget, Chancellor George Osborne is in effect taking the UK back to a similar rate to the pre-2008 rules, when Capital Gains Tax was increased to 24 per-cent. In light of this, property remains a good investment and Capital Gains Tax still compares favourably with income tax set at 40 per-cent.
Rick added, “The increase to 28 per-cent is in reality, better than first expected. I think that this new rate will offer some comfort to investors and they will be less likely to desert the buy-to-let sector.
“If you are a long term investor, now could be a great time to buy because if you take a ten year view, Capital Gains Tax could be back down again by the time you intend to sell. Many of our landlords in Sheffield believe in the long term value of buy-to-let – and when you look at the alternatives, it isn’t difficult to see why bricks and mortar retain their appeal.”
Belvoir Lettings Agency Sheffield is the One Stop Specialists for Lettings including Property Management, Tenant Find, Investment and Wealth Management Advice, Fit-outs and Renovations, Furniture Packs and Investment Property Insurances
