Conservative MP, Kevin Hollinrake, has tabled an amendment to the Finance Bill calling for a cut in the capital gains tax (CGT) paid by landlords when selling a rental property to a sitting tenant
Former Chancellor, George Osborne, announced in the Budget that the 28% rate of CGT would be cut to 20% however, residential property was excluded from this meaning that landlords still get charged the 28% rate when they decide to sell.
Hollinrake, who is also co-founder of Hunters estate agents, has tabled an amendment to Clause 72 of the Bill that would extend the 20% CGT rate to buy-to-let landlords.
Research from the Residential Landlords Association (RLA), who originally put forward the motion to put the measure into an amendment, has found that 77% of buy-to-let landlords would consider selling to tenants if the tax was lowered.
The cut to CGT would encourage landlords to sell properties in a way that meets the government’s ambitions for homeownership.
RLA policy director, David Smith said: ‘Many landlords are now considering their future in the market following recent tax increases whilst others will be looking to sell as part of the natural churn of properties in the rental market.
‘This amendment would help achieve the government’s aim of encouraging and supporting home ownership for aspiring first time buyers whilst easing some of the excessive tax burdens recently placed on landlords.’