The rate of capital gains tax (CGT) payable on residential property gains is to be cut from 28% to 24% from 6 April, Chancellor Jeremy Hunt has announced.
Unveiling the change, Hunt said that the Government had received advice that the current 28% rate was discouraging landlords and second home-owners from selling their properties. He said that despite cutting the tax, the measure would lead to an overall increase in tax receipts, by incentivising more sellers to enter the market.
Richard Rowntree, managing director for mortgages at Paragon Bank said: “We welcome the reduction of the higher rate of capital gains tax paid on residential property from 28% to 24%. This measure is intended to help to stimulate transactions while not negatively impacting net tax revenue. The move will hopefully increase fluidity within the property market, spanning both the owner-occupier and private rented sector, and mean more people will be incentivised to buy and sell properties in a way that best meets their needs and those of society more broadly.”
In a further announcement, Hunt said he is to abolish the Furnished Holiday Lettings (FHL) regime from April 2025. Under current rules, owners of FHLs can qualify for a lower 10% rate of capital gains tax when they sell their properties. This has led to accusations of an unfair playing field.
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