UK landlords selling up to stay ahead of possible Capital Gains Tax increase

Concerns about a potential rise in Capital Gains Tax (CGT) in the upcoming Autumn Budget may be prompting more landlords to put their properties on the market, according to recent data from property portal Rightmove.

The data indicates a notable rise in the proportion of homes formerly rented out that are now being listed for sale.

Currently, CGT on residential property sales is 18 per cent for basic rate taxpayers and 24 per cent for those in the higher rate tax band, with a £3,000 tax-free allowance.

However, there is speculation that the Treasury might align these rates with income tax rates in the forthcoming budget.

Rightmove’s data shows that nearly 18 per cent of homes on the market were once rental properties, up from 14 per cent a year ago and significantly higher than the 8 per cent recorded in 2010.

This increase is particularly pronounced in London and Scotland, where former rental homes now make up a significant portion of properties for sale.

If you’re a landlord in the UK, you may want to consider the following:

  1. Check your tax situation – Now’s a good time to review your tax position ahead of the Budget. If the tax rate is set to rise, it could be wise to consult with a tax advisor to understand how this might affect you.
  2. Think about timing – If you’re thinking of selling any rental properties, you might want to do it sooner rather than later. Selling before any potential tax increase could help you save money.
  3. Explore your options – Selling might not always be the best move. Consider other options like reorganising your property portfolio or waiting to see what happens with the tax changes.
  4. Stay updated – Keep an eye on Government announcements and Budget updates on and before 30 October. This will help you stay ahead of any changes and adjust your plans accordingly.
  5. Get professional advice – Talk to a financial advisor or accountant to get tailored advice and make sure you’re making the best decisions for your situation.

If you need any advice on how an increase in CGT could impact you, please contact our team.