CGT is top landlord concern

Bobby Hellard

June 13, 2016

coins tax return bill

Capital Gain Tax exemption for residential properties is the biggest concern for professional landlords at the moment, according to research from Amicus Property Finance.

Nearly two-thirds (63%) of landlords cited the Chancellor’s decision to maintain existing CGT rates on residential property sales as their main worry and Amicus CEO John Jenkins believes that rising interest rates and falling property prices will also cause sleepless nights for landlords.

He said: “The tax landscape has become a lot more hostile for landlords and it’s no surprise that this dominates their list of concerns for the year ahead.

“In contrast the prospect of interest rate rises, the threat of falling property prices and difficulties in accessing long-term finance are less likely to be keeping landlords awake at night.”

The next biggest worry for landlords is the abolition of tax relief on mortgage interest, which means that landlords will no longer be able to claim tax reliefs worth 40% or 45% of the interest payments on their buy-to-let mortgages.

Instead the maximum tax relief will be set at 20%, although the change will be introduced over a four year period.

Other changes that have landlords worrying include tax changes to maintenance and improvements (57% concerned) increasing costs being passed on from the right-to-rent legislation (53%) and rising legal and accountancy fees (52%).

Even with the changes Amicus are still expecting a strong year for the buy-to-let market.

Jenkins added: “Despite the new tax changes we are seeing a sustained and growing appetite for property finance driven by the inability of some lenders to act sufficiently and quickly to respond to demand.

“We’re anticipating a strong 12 months for the professional buy-to-let market.”

Surprisingly the impending referendum held little concern for landlords with fewer than half (44%) expressing a concern about the impact of Brexit and only a third (34%) were worried about accessing long-term finance to grow their portfolios.