Latest Property News around Barry, Cardiff, Bridgend

There continues to be a mixed reaction to the Capital Gains Tax announcements by Alistair Darling in his recent pre budget round up.

Several experts believe wealthy private investors, some buy-to-let landlords and people with second homes are set for a bonanza as the tax rate on their profits will fall from a maximum of 40 per cent to only 18 per cent.

As the rules don’t come into force until next April, some property investors who own second homes will delay any decision to sell. It may also encourage investment in buy-to-let property and second homes. This could prop up property prices and make it even harder for first time buyers.

But Richard Davies, area director at Chesterton, said the overhaul of the current system of Capital Gains means that the existing taper relief system will be scrapped - a move that will affect a wide range of property owners.

Davies said: “While everyone will still be eligible for CGT allowance, which currently stands at £9,200, any profit earned over that amount will be charged at a flat rate of 18 per cent. This is good news for those with a second home and buy-to-let landlords, who are presently charged between 24 and 40 per cent, depending on how long they have owned the property.

“ However, this announcement is disappointing for those who own a furnished holiday let, as their tax liability is now set to rise from ten to 18 per cent.

“ There are also concerns that we will see a flood of buy-to-lets being put on the market immediately after the April deadline, as there is now no incentive to invest in property on a long-term basis.”