Insurance News Archive

Buy-to-let property sellers benefit from lower Q2 tax burdens

Landlords who sold their buy-to-let properties in the second quarter of the year benefited from lower capital gains tax (CGT), it has been revealed.

The Mortgage Works worked out that owners achieved price appreciation of 43 per cent on houses and 42 per cent on flats worth £200,000 for the first three months of 2008, creating a total tax burden of £34,895 on houses and £34,603 once CGT had been taken into account.

However, due to the introduction of an 18 per cent flat rate tax, landlords selling properties in quarter two (Q2) saw these burdens almost halve to £16,581 for houses and £15,975 for flats.

Andy McQueen, managing director of The Mortgage Works, said the buy-to-let market has remained active throughout the year, despite economic conditions.

He continued: "Although the buy-to-let market has, like all sector, been impacted by the credit crunch, landlords have continued to buy and sell properties on a regular basis.

"This has resulted in buy-to-let forming a higher proportion of net lending than previously seen in the mortgage market."

Meanwhile, recent research by MoneySupermarket.com found buy-to-let mortgage products remain available but are less attractive than they used to be due to higher interest rates.

Louise Cuming, head of mortgages at the website, said worrying times could be ahead for landlords.

29 Aug 2008