Buy To Let Tax Changes - How Will You Be Affected?

The lettings and sales market seems to be ever increasing in the North East, so we thought it would be useful to highlight the recent property tax changes in this month’s blog.

In 2015 it was declared that Stamp Duty Tax on buy to let mortgages would rise an extra 3% from April 2016. In addition an announcement was made in the Budget, the Chancellor declared that Capital Gains Tax would remain the same for buy to let landlords, this will continue to be the current rate of 28 per cent, or 18 per cent respectively on any gains they make when they sell a property. The Budget states the move was intended to “ensure that CGT provides an incentive to invest in companies over property”.

What is Capital Gains Tax (CGT)?

Capital Gains Tax is tax on the profit of a property that, normally when you sell an asset and it increases in value. You are taxed on the gain you make on your property and not the money you receive.

The basic rate of capital gains tax will fall from 18% to 10% from April this year, while the higher rate will fall from 28% to 20%.

As many of you are probably aware any capital gains made on residential property will not be eligible for the newly lowered rates as announced in the Budget.

Bowson Lettings understand that Capital Gains Tax can sometimes be a costly and stressful task. Some may find filling out a tax form time consuming. We suggest that to keep up to date, plan ahead and keep this stress to a minimum. Here is a useful website by the Government on working out what you need to pay: https://www.gov.uk/capital-gains-tax/work-out-need-to-pay

For further information on how the tax changes affect you as a landlord, send us an email atnewcastle@bowsonlettings.co.uk. Our skilled property team will be happy to answer your queries.