How much extra rent do you need to offset Labour’s proposed CGT grab?

I don’t think it will ever be as simplistic as you put. Rent is governed by market rate so if other landlords in your area doesn’t work to that same formula then rent will only rise based on the area ask and what renters can afford. Also note that landlords who operate in a limited company will not be affected by such a change. Also if you increase rent you need to factor in the extra tax grab due to S24 of gross income.

Suggestion would be to park capital appreciation and only look for a specific ROI over 10years, work backwards from current rent rate. Any extra capital can be taken out (tax free) at remortgage time and used to reinvest or do what you like. If you can get to an infinite ROI then why would you ever sell?

Increasing the rent will increase the yield, which will increase the value of the property.
Higher property price will make more capital gains which will mean higher capital gains tax.

Higher capital gains tax means you will need to charge more rent.

Your formula needs to be recursive.

Another strategy would be to sell before the new capital gains taxes come in and then buy after the adjustment in property values has taken effect. In which case they should start rising at 5% again at some point.

However there are other factors at play like interest rates, illiquid assets etc that will also affect the pricing.

Just increase the rent as much as the market will bear.

Why would a non earning 20% taxpayer have to increase rent,
If they only had a couple of rentals
And selling one year

So with about 4.6 million rental properties and about 2.8 million Private landlords your question sounds Mad to me.
Are you a Landlord ?
Or a Tenant ?
Or a researcher looking for a stick to beat Landlords !
A huge number of Landlords own just one rental property and the reason for that is simple Very Very few are mad enough to start up a BTL business.
Inheriting a property, Couples moving in together and renting out there old home, Homes under the Hammer !

With respect I think the way you talk of rental goals is pointless. Surely we all want as much rent as possible. But the market will only tolerate certain levels .. it doesn’t care what a landlord’s goals are or what tax he/she may have to pay now or in the future.

This is a most useful starting point for some calculations. It could work on the capital value of individual self contained houses, which are usually based on market value, but those who run multi let units will sometimes have the value determined by a percentage of the rent roll.

you can get yourself into knots trying to work this out. Charge the most you can and as regularly as you can (annually without fail) to ensure you max out rental income. If every LL does this then the market rate will always be at the max it can be (and rental charge will have taken into consideration additional costs forced on the LL like SL for example), and at the level that a potential new tenant is already expecting/aware of.

If the RRB comes in and then its a cost per property for the mandated ombusdman fee and national database fee then all this will just be an extra cost to EVERY LL and will be passed on with a rent increase.

Hands up any LL who WONT BE adding these costs to the rent??? So the market rate will increase again after these costs are passed on to the tenant too...

IF there is low demand or you want to avoid a void (adn 100% CT) then YOU COULD make the decision if you then want to reduce the rent to get it let, but there is no calculation for that. Only you know what that figure is.

Focus on cutting costs as much as you can, where you can have more control. Look for a cheaper mortgage deal, building insurance and use workmen not in vat for example. Consider removing white goods so you are not liable to replace things when they go wrong/need repairs or have to have annual PAT testing/gas checks etc. Always take the max deposit allowable.

Working out what the government want to grab is time wasted especially if you have to sell - and I mean HAVE to sell. If you have already got to that point then you will have to pay whatever the tax is unless you look NOW at moving things to make the bill less when you do finally sell.

I think if you keep a property going now, you have to think of keeping it going for at least 10 years from now. If everything comes to pass that is being thrown at us then its a decision to stay on or step out before the RRB hits.

One thing is for sure, after the RRB hits the whole sector is going to be very different to what it is now.

Successive governments conveniently (for them) dont take inflation into account when calculating CGT. For example, you buy a property for £200k. You keep it for 10 years, and sell it for £300k. So you made £100k ......right? Wrong, ten years of inflation have eroded the the capital gain. You maybe only actually gained £70k (in real terms) but get taxed on £100k

Reply to the comment left by David100 at 01/10/2024 - 12:55
True but remember a mortgage works in the opposite direction; inflation will erode that debt in your favour so could just be swings and roundabouts

Reply to the comment left by David100 at 01/10/2024 - 12:55
Another reason to buy/sell property as a company. Inflation is factored in which reduces your “chargeable gain” tax bill although (it’s still frozen since 2017!)