Changes to capital gains tax rules will come into effect from April 6th, 2020, resulting in many tax advisers urging landlords to consider selling their buy-to-let properties in order to avoid a hefty increase in their tax bills.
Couples who are breaking up, accidental landlords and those who have purchased a second home before selling their first one could all face an unexpected tax bill that will take a large slice from their profits if they sell after the change to capital gains tax rules come into effect. Many experts within the property industry are warning that most people who are likely to be impacted by these changes are unaware that they are even set to happen.
Tax advisers warn that landlords who are unaware of the tax changes could end up facing a huge financial shock next year, so it’s important that anyone who may be considering selling up in the near future sits down with an expert to number-crunch as soon as possible.
Some accountancy firms claim that several of their clients will have to face paying out extra capital gains tax that will total more than £20,000 if they delay property sales until after the new rules are put into action.
The scale of the tax increase will be so substantial for many landlords that it’s making them question whether they want to hold onto their buy-to-let properties or sell out now before the tax changes. Selling a property is likely to take several months or more in many cases from start to finish, and landlords don’t have a great deal of time to make their decision. Experts say this acts as a strong disincentive, among others, for new buy-to-let owners who are being increasingly hit by the taxman.
The Treasury hopes to raise as much as £500 billion from the new tax changes by 2024. All landlords pay capital gains tax if they sell a property that has increased in value by more than the annual exempt amount - which is currently £12,000. Landlords who once lived in a buy-to-let property as their main home at some point during ownership can clam letting relief.
If you’re a landlord in Cardiff looking for advice on things such as property management services, selling your property or making further investments in Cardiff, then don’t hesitate to contact our expert lettings team here at CPS Homes. Call us on 02920 668585, e-mail firstname.lastname@example.org or pop into one of our three Cardiff branches.