Hunt’s CGT changes will cost average landlord up to £2,600 more per sale

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Estate agency Hamptons has warned that the Chancellor’s changes to the capital gains tax system announced in his Autumn statement last week will cost landlords up to £2,600 more each time they sell a property.

CGT bills depend on the price of the property and the tax status of the landlord involved, but all will be hit by JeremyHunt’s decision to cut the annual exempt amount for capital gains tax from £12,300 to £6,000 next year, and then halve it again to just £3,000 from April 2024.

This means landlords who report their tax via their personal tax return each year (rather than limited company structures) will pay 18% on any capital gain over these new lower threshold if they are basic rate tax payers, and 28% for those who are ‘higher rate’.

Hamptons has based its calculation on data that reveals the average ‘profit’ made by landlords on BTL home sales the year has been £98,050.

Thresholds

This means that, once the new thresholds are introduced, the CGT paid by a lower rate tax payer will increase by £1,1770 and for a higher rate one, £2,610… and then increase again in 2024.

“The new changes to capital gains tax, will add further pressure to landlords and we are likely to see more rental properties put up for sale,” says Kevin Roberts, Managing Director, Legal & General Mortgage Services.

“A greater supply of housing for buyers will definitely be welcomed by some, but this could prove a painful development for renters.

“The rental market is already suffering from a lack of stock and rising rents.”

Read more: Complete guide to landlords' tax for 2022/23.

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