Potential Budget CGT relief and profit split for selling to long term tenants?Make Text Bigger
On Friday we reported on the RLA Press release RLA ask for longer term tenancy tax incentive
However, over the weekend the Sunday Times has reported that government may consider adding an incentive to Landlords for selling to their long term tenants in the Budget on 29th October.
The Article said: “Under plans that have found favour in Downing Street, landlords would not pay capital gains tax when selling to tenants who have lived in a property for three years or more.
“The plan is designed to spur landlords to offer longer tenancies and then to sell on to a new generation of homeowners. Conservatives say a plan could be unveiled their think tank, “Onward” and is under consideration for inclusion in the Budget”
Potentially landlords would be eligible for CGT tax relief with the profit split equally with the tenant, who could use it as part of their mortgage deposit.
News from the Onward Website, Click Here to view, said:
“A new policy paper on the private rented sector in England, argues for a new route to ownership for private renters and greater incentives for landlords to offer long-term tenancies.
“The paper argues that Ministers should give Britain’s private renters a new Chance to Buy their rented home by rewarding landlords who sell to long-term tenants.
Onward’s 3 proposals:
- Existing buy-to-let properties would be eligible for 100% capital gains tax relief if the property is sold to a sitting tenant who has lived there for 3 years or more.
- The gain from this tax relief would be split evenly between the landlord and the tenant, giving the landlord a windfall when they sell and the tenant thousands of pounds towards their mortgage deposit.
- Onward proposes that the Treasury should pay for this policy by tightening other tax reliefs for buy-to-let investors, including reducing the Private Residence Relief period from 18 months to 6 months and abolishing Lettings Relief of up to £40,000.
Therefore, for Landlords there will be some element of giving in one hand but taking from another.
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