Is living the high life in the UK’s capital becoming unattainable? This video explores the current state of Landlord property investing, the london housing market, highlighting the challenges of renting in london and the impact on the overall housing market. With the rising cost of living in london, finding london property is increasingly difficult, leading to expensive housing and a squeeze on those looking to live in london.
Let’s talk about Capital Gains Tax because this is almost certainly getting hammered in the November budget. Right now, if you sell a property that isn’t your main residence, you pay twenty-four percent on any gains above the annual allowance, which itself has been slashed to just six thousand pounds for this tax year. That’s already brutal compared to what it used to be. The CGT allowance was twelve thousand three hundred in twenty twenty-one, and now it’s been cut by more than half. But the rumors swirling around Westminster suggest Reeves is looking at aligning CGT rates with income tax rates. That means if you’re a higher rate taxpayer, you could be facing forty percent. If you’re in the additional rate band, we’re talking forty-five percent on your property profits. Think about what that actually means in real numbers. You buy a buy-to-let property for two hundred and fifty thousand pounds. You hold it for fifteen years, dealing with all the tenant headaches, the boiler breakdowns at two in the morning, the void periods where you’re covering the mortgage yourself, the section twenty-one ban making it harder to regain possession. The property increases in value to five hundred thousand pounds. That’s a two hundred and fifty thousand pound gain. Under current rules, you pay six thousand in annual allowance, leaving two hundred and forty-four thousand taxable. At twenty-four percent, that’s fifty-eight thousand five hundred and sixty pounds in tax. Painful, but manageable. Under the rumored new system, if you’re a forty percent taxpayer, that same gain costs you ninety-seven thousand six hundred pounds. If you’re at forty-five percent, it’s one hundred and nine thousand eight hundred pounds. You’ve just lost an extra fifty thousand pounds or more to the Treasury compared to selling under the current system. This isn’t speculation anymore. Multiple tax experts, accountants who specialize in property, and even some former Treasury advisors are saying this is the most likely revenue raiser because it hits wealth, not income, which means Reeves can technically keep her promise about not raising income tax rates. The impact on the market will be massive. Investors who were considering selling are rushing to complete transactions before November twenty-sixth. Some are accepting lower offers just to get completions through before budget day. Portfolio landlords are having urgent conversations with their accountants about whether to crystallize gains now even if the timing isn’t perfect. And anyone who was planning to exit the market in the next few years is asking themselves whether they need to do it right now, immediately, before the window closes.
Credit to : Property Reporter