Capital gains tax likely to hit UK investors hard

UK property investors could be looking to offload properties if capital gains tax rises are implemented by the new Conservative and Liberal Democrat government, it has been suggested.

If the move takes place, which is widely expected, real estate speculators are likely to suffer as a result, with buy-to-let landlords forced to pay expensive rates on their properties.

Capital gains tax currently stands at 18 per cent, but could be set to soar as high as 40 or 50 per cent if the changes are adopted.

The National Landlords' Association has called upon the government to recognise buy-to-let investors as businesses or entrepreneurs so that they can be exempt from the revised rate.

"We are concerned that a tax increase of this nature will act as a barrier to further investment in residential property just at a time when there is an urgent need for more housing," David Salusbury, the organisation's chairman, said.

"There should be further consultation with the industry before drastic changes are made."

Yolande Barnes, head of residential research at Savills, recently claimed that the result of the general election would have a profound effect on the recovery of the UK property market.

Like this? Then share with your friends and colleagues!