CGT figures highlight a landlord exodus is underway

CGT figures highlight a landlord exodus is underway

0:01 AM, 7th August 2023, About A year ago 2

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New government figures on Capital Gains Tax (CGT) point to a significant number of landlords leaving the buy to let sector, according to one wealth management firm.

Quilter says the data reflects a wave of landlords who are exiting the market due to rising mortgage rates, reforms in the private rented sector (PRS), and the potential deadline for meeting Energy Performance Certificate (EPC) deadlines.

The latest data from HMRC reveals that during the 2022/23 tax year, 139,000 taxpayers reported a total of 151,000 residential property sales, resulting in a combined tax liability of £1.8 billion.

This liability is much larger than was seen two years ago.

‘There is an exodus of landlords from the property market’

The firm’s tax and financial planning expert, Rachael Griffin, said: “This data suggests that there is an exodus of landlords from the property market as the tightening of tax laws on buy to lets make them a more unattractive investment.

“Coupled with this the continuing high property values but the simultaneous threat of a property price crash is seemingly making more landlords opt to sell up.”

She adds: “How this ultimately impacts the market for all prospective buyers and renters is yet to be seen.

“Currently property prices are slipping slowly but rent remains sky high as renters compete for a dwindling stock of rental properties.”

CGT comes from a small number of taxpayers

The government’s data shows that most CGT comes from a small number of taxpayers who make the largest gains.

In the 2021 to 2022 tax year, 45% of CGT came from those who made gains of £5 million or more. This group represents less than 1% of CGT taxpayers each year.

In the 2021 to 2022 tax year, income and the size of gain increased, but the number of individual taxpayers decreased. In that year, 45% of gains for CGT-liable individuals came from the 12% of individuals with taxable incomes above £150,000, the additional rate threshold for income tax.

London and the South East of England accounted for around half of total gains (49%) and tax liability (51%) in the 2021 to 2022 tax year.


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cashcow

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19:34 PM, 7th August 2023, About A year ago

Does this not point to a hidden agenda from the government to push landlords to sell up in order to cash in on CGT, plus this plays into the hands of the banks who need movement in the market to make money.

GlanACC

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17:02 PM, 9th August 2023, About A year ago

No hidden agenda from the government, just incompetence. Different departments making conflicting rules/laws.

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