{"id":5025128,"date":"2019-08-05T14:00:51","date_gmt":"2019-08-05T13:00:51","guid":{"rendered":"https:\/\/www.buyassociation.co.uk\/?p=5025128"},"modified":"2019-08-05T14:00:51","modified_gmt":"2019-08-05T13:00:51","slug":"half-a-million-landlords-impacted-by-changes-to-capital-gains-tax","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-au\/2019\/08\/05\/half-a-million-landlords-impacted-by-changes-to-capital-gains-tax\/","title":{"rendered":"Half a million landlords impacted by changes to capital gains tax"},"content":{"rendered":"

New rules for capital gains tax means that some landlords could see their costs increase significantly when they come to sell their former homes.<\/strong><\/p>\n

Landlords who previously lived in a property but then let it out can currently claim capital gains tax relief on the property for up to 18 months after they have moved out. From April 2020 this relief drops to just nine months, which could affect up to half a million landlords<\/a>.<\/p>\n

The tax break was originally introduced to help accidental landlords – those who had to move for work, for example, and were unable to sell their home or chose to rent. It stood at 36 months until 2014 when it was reduced to 18 months.<\/p>\n

Capital gains tax on second properties<\/h4>\n

Capital gains is a tax charged on the profit<\/a> made on an investment property when it is sold. Landlords expect to be taxed on the difference between the price the property was purchased for and the price it sold at. For landlords that rent a property that was once their main home, capital gains tax applies on the amount the property increased in value when they weren\u2019t living in it.<\/p>\n

Under the current rules, a landlord that has owned a property for 13 years and lived in it for six would only be taxed on five years and six months of gains; from April 2020 they will be liable for taxation on six years and three months.<\/p>\n

Gordon Andrews, tax and financial planning expert at Quilter, said: “The government expects to net an additional \u00a3470m over the next five years in additional tax revenues as a result of this change. It means that owning a second home becomes slightly less profitable for those that rent out a property they previously lived in.”<\/p>\n

Month of change<\/h4>\n

The rule change means that holding onto a property when you move home in the hope to benefit from rising house prices<\/a> later down the line, will be less attractive to some. However, married couples will see a benefit as a spouse or\u00a0 civil partner can now inherit the relief. Previously they would not have been entitled to the relief unless they had personally lived in the property.<\/p>\n

April 2020 is a month of change for landlords that previously lived in their rental properties long-term as the government scales back lettings relief. Currently \u00a340,000 of their gain is exempt from capital gains tax when they sell their former home after renting it out, for couples it\u2019s \u00a380,000. However, from April 2020 only landlords that have lived in the property with their tenants<\/a> will qualify for this benefit.<\/p>\n","protected":false},"excerpt":{"rendered":"

New rules for capital gains tax means that some landlords could see their costs increase significantly when they come to sell their former homes. Landlords who previously lived in a property but then let it out can currently claim capital gains tax relief on the property for up to 18 months after they have moved… Read more »<\/a><\/p>\n","protected":false},"author":3380,"featured_media":19662,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[2,26],"tags":[15,207],"acf":[],"_links":{"self":[{"href":"https:\/\/www.buyassociationgroup.com\/en-au\/wp-json\/wp\/v2\/posts\/5025128"}],"collection":[{"href":"https:\/\/www.buyassociationgroup.com\/en-au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyassociationgroup.com\/en-au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-au\/wp-json\/wp\/v2\/users\/3380"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-au\/wp-json\/wp\/v2\/comments?post=5025128"}],"version-history":[{"count":0,"href":"https:\/\/www.buyassociationgroup.com\/en-au\/wp-json\/wp\/v2\/posts\/5025128\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-au\/wp-json\/wp\/v2\/media\/19662"}],"wp:attachment":[{"href":"https:\/\/www.buyassociationgroup.com\/en-au\/wp-json\/wp\/v2\/media?parent=5025128"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-au\/wp-json\/wp\/v2\/categories?post=5025128"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-au\/wp-json\/wp\/v2\/tags?post=5025128"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}