A CGT increase would freeze the PRS

On:

"It recommends that to support the Government’s ambitions for homeownership there should be a CGT exemption or reduction where landlords sell properties to sitting tenants."

There is no way I could sell to my sitting tenants as they are trashing the property. There is writing on the walls, there is filth and food waste ground into every floor and into every carpet, both upstairs and down. There is excrement on the walls of the toilets, every surface in the kitchen (including the ceiling) has filth on it. The bathrooms are filthy and the whole house stinks. Outside there is uncollected rubbish everywhere.

I would lose more by being forced to sell my property to my tenants in its present state than I would in CGT.

Yes a lot of us invested in property instead of a pension assuming that it would provide for older age but now we are being robbed by this unfair tax regime and could well fall short of what is needed. How about we property investors just refuse to vote on mass for anyone unless they start listening to what we are saying ??

Reply to the comment left by DP at 10/02/2021 - 10:31
Unfortunately there aren’t enough of us to force any government to change their policies. As many other people have said before we are a soft target and are being penalised for trying to provide for ourselves and our families rather than relying on the state. I do wonder sometimes if I should have just spent all my money rather than invest for the future.

Reply to the comment left by John at 10/02/2021 - 11:09
I was discussing this once with someone who was also dismayed by how she was being penalised for running a business during the regime of the egregious Gordon Brown who attacked pensions and anything else he could and racked up an enormous deficit: Her comment was: "...the only real tax efficient investment is an investment HMRC doesn't know about."

Where we are now is that he government has also racked up an enormous debt trying to eradicate a disease that it was obvious at the start could not be eradicated. The bulk of the country's wealth is in residential property and pensions. So any government is going to be tempted to attack it. It's a recipe for the flight of capital, a thriving black market, and offshore finance.

I think the only solution is to either incorporate or sell your property piecemeal in years in which you are not drawing down on other sources of income to minimise the tax bill. Or incorporate.

In my case, given that my tenants are trashing my property, I'm guessing that my best bet is to sell my property not to my tenants, but to my own company for a low value (because the tenants trashed it) then take the proceeds in the company. It would be very surprising indeed if any chancellor focused on economic recovery significantly raised CT.

Reply to the comment left by DP at 10/02/2021 - 10:31
Hi I read your post and would comment as follows. If your rental property is going to serve you as a pension then surely its principle purpose would be to provide regular income. As long as you retain the property, it has a good yield, is kept in good condition and you make appropriate arrangements for your tax affairs it can still do that so why would you sell it? (and trigger capital gains tax) You are also able to take out equity tax free if the property increases in value as you remortgage but I accept that there will be a limit to this. But I don't think this move in it self will stop people investing in property. It is in our financial dna in this country despite the government's efforts to stop landlords surviving in recent years particularly the last one.

Wait and see what happens. Speculation is exhausting. Plan for the worst and hope for the best. For those young enough, who do not need flexible liquidity, either incorporate, or do something else. The Government may say we gave you 4 years fair warning, and since you chose not to sell, we will clobber you again. I sincerely hope not, and these proposals are just proposals at present. There may be some good tenants who wish to buy at attractive rates, but none of mine do. I have asked them all.

Christoper at larst somone to give some form of perspective.

Why dont we all get real and recognise where we all are it’s been a terrible year and we are all part of it, sometimes those of us in a more fortunate position have to step up to the mark and contribute for the greater good.
I often read in amazement remarks by so many and fear these people have been dazzled in the past by the get rich quick “Homes Under the Hammer” and programmes of such ilk.
To me a property Busines is just like is any other Business needing to be well planned for the future expecting the unexpected with reserves to cover for the ups and downs when they are sure to come.
Much of the problems many are suffering in this current market is in thinking they will continue to have a 10% capital growth year on year and an 8% plus return on rental. Fuelled in part by greedy lenders of the past years with an almost pyramid Lending policy based upon an ever-increasing unrealistic growth from those queuing up to borrow putting themselves on the line – “buyer beware”.
Any Property Business started 10 years ago should by now be sitting upon a nice Capital Growth and have enjoyed a good 6% Year on Year rental return, for me not a bad business model and a basis to expand providing gearing remains sensible. If when the time comes to sell why not pay tax on your return what makes this sector so special. I have many times-built Manufacturing businesses, sold them on and paid my Tax why should it be any different for the properties I own. No I do not want to pay Tax but when the time comes I will make my return and write the cheque, if I had made the wrong decisions earlier there is no Gain and no tax to pay.
We all had the chance to decide if we wanted to be part of the BTL market no one forced our hand, when the going gets tough we cannot go on winging all the time we need to get smarter, plan sensibly and find different solutions, now or the future the same issues will always present themselves so do not think everything will be exactly as the status quo – start planning now for the future its good Business sense.
I guess many of you will be thinking I am a signed-up member of Momentum but please believe me I am far from anything but. I have lived long enough to experience the ups and downs of life and tried hard learn from the experience.

Reply to the comment left by Tony Southwold at 10/02/2021 - 14:39
If you sold a business now you would be eligible for entrepreneurs' relief under the current tax regime (with good reason). Under previous tax regimes you would have been eligible for taper relief (with good reason).

The only people who will be nailed by the current proposals are the large numbers of landlords who acquired 1-2 properties to supplement their pensions. Everyone else will just incorporate.

So this just penalises the little guys.