12/06/2024

Conservatives Promise No Capital Gains Tax for Landlords Selling to Tenants

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Shock policy proposals yesterday by the Conservative Party, as reported by the BBC and Letting Agent Today, introduce significant incentives for landlords. The key proposal is the scrapping of Capital Gains Tax (CGT) for landlords who sell properties to their tenants. This move could have a big impact for landlords, particularly in central London.

CGT Relief Proposal

Prime Minister Rishi Sunak announced that, if re-elected, the Conservatives would implement a two-year temporary CGT relief for landlords selling to their tenants. This policy aims to “incentivise landlords to give tenants a chance to own the home they live in,” reducing the CGT burden that landlords currently face on profits from property sales. (BBC News)

Benefits for Landlords

  1. Tax Savings: The elimination of CGT can result in significant financial savings, increasing the profitability of selling to tenants.
  2. Simplified Process: Selling directly to tenants can avoid the complexities and delays associated with open market sales, like property chains and organising viewings with multiple prospective buyers.

Market Implications

The proposed CGT relief is expected to facilitate smoother transactions and potentially increase the number of properties sold to sitting tenants. This could lead to a more dynamic property market.

The National Residential Landlords Association (NRLA) commented that while this incentive has the potential to help tenants become homeowners, it does not address broader challenges in the rental market caused by previous tax increases. (BBC News)

The proposed CGT relief for landlords selling to their tenants marks a significant potential shift in the property market. For central London landlords, this presents an opportunity to maximise profits and helps tenants move up into homeownership.

It’s a shame that the Conservative party hasn’t demonstrated this pro-landlord approach during their 14 years of tenure.

This post was written by:

Steven Herd

Steven's extensive 30 years of estate agency experience in London culminated in launching MyLondonHome, which has enabled him to bring together a hand-picked team to provide the high level of quality advice, market strength and service he is renowned for.

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