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Speculation is mounting that landlords could be given a tax break in the Autumn Budget when selling properties for their long-term tenants.<\/strong><\/p>\n Reports at the weekend suggested the Autumn Budget, looking for 29 October, could bring a cut in capital gains tax (CGT) for buy-to-let investors selling to tenants.<\/p>\n Here, we take a look at the budget speculation for landlords, and provide suggestions about how taxation works on property works.<\/p>\n <\/p>\n Landlords might be offered favourable tax terms if they target existing tenants who've lived in their property not less than 3 years.<\/p>\n The Sunday Times says the proposal, which was raised by the Conservative think tank Onward, is under consideration for inclusion within the upcoming Budget announcement.<\/p>\n Under the proposal, landlords wouldn't need to pay CGT when they sell their houses to long-term tenants, using the profits on capital growth instead being split between them and the tenant.<\/p>\n Currently, landlords who sell a rental property be forced to pay CGT of up to 28% on profits once they sell a property.<\/p>\n The Residential Landlords Association has suggested the modification would likely make landlords more prepared to offer longer tenancies, but says refunding landlords the additional 3% stamp duty levy should they sell to a sitting tenant would be 'more suitable'.<\/p>\n Onward states that its proposal would cost lb1.3bn a year, and that up to 50 % millions of households could benefit over 5 years.<\/p>\n The think tank estimates a typical capital gain per property of lb15,000 – meaning the landlord and also the buyer would each get lb7,500.<\/p>\n In London, meanwhile, it estimates the windfall could be around lb19,500 each for landlord and buyer.<\/p>\n If you sell a good investment property, you'll need to pay capital gains tax (CGT) in your profits. CGT is charged at a higher rate on property than other assets.<\/p>\n Basic-rate taxpayers pay 18%, and better and additional-rate taxpayers pay 28% on property sales.<\/p>\n All taxpayers come with an annual CGT allowance – in 2022-19 you may make tax-free capital gains of up to lb11,700.<\/p>\n You can also deduct specific costs for example stamp duty, improvements towards the property and portfolio costs. For example, for those who have several properties and you sell one baffled, you are able to offset this against the others.<\/p>\n To find out more about deductions as well as for a worked example on how CGT works, take a look at our full guide on capital gains tax on property.<\/p>\n <\/p>\n While this proposal might not come to fruition, it arrives at a time of uncertainty around the government's intentions to bring in mandatory three-year tenancy periods.<\/p>\n The plans, that have been met with resistance by landlord groups, would involve tenants being entitled to a three-year initial agreement, with a break clause red carpet months. If the proposal goes ahead, it’s possible the federal government may turn to provide incentives to inspire longer-term tenancies and eventually, fuel more sales to first-time buyers.<\/p>\n There could also be an update around the Tenant Fees Bill in the Autumn Budget.<\/p>\n The bill is placed because of its second reading in the House of Lords today, meaning it's closer than before to coming into law.<\/p>\n The new rules would ban agent fees charged to tenants, and cap all the rent landlords or their letting agents can ask for up front (likely to be six weeks). It remains likely that this bill will be to law at some stage in 2022.<\/p>\n","protected":false},"excerpt":{"rendered":" Speculation is mounting that landlords could be given a tax break in the Autumn Budget when selling properties for their long-term tenants. Reports at the weekend suggested the Autumn Budget, looking for 29 October, could bring a cut in capital gains tax (CGT) for buy-to-let investors selling to tenants. Here, we take a look at<\/p>\n","protected":false},"author":1,"featured_media":5224,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[32],"_links":{"self":[{"href":"https:\/\/tdafinance.com\/wp-json\/wp\/v2\/posts\/5229"}],"collection":[{"href":"https:\/\/tdafinance.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tdafinance.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tdafinance.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tdafinance.com\/wp-json\/wp\/v2\/comments?post=5229"}],"version-history":[{"count":0,"href":"https:\/\/tdafinance.com\/wp-json\/wp\/v2\/posts\/5229\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tdafinance.com\/wp-json\/wp\/v2\/media\/5224"}],"wp:attachment":[{"href":"https:\/\/tdafinance.com\/wp-json\/wp\/v2\/media?parent=5229"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tdafinance.com\/wp-json\/wp\/v2\/categories?post=5229"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tdafinance.com\/wp-json\/wp\/v2\/tags?post=5229"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Could landlords get a capital gains tax break?<\/h2>\n
How would it affect landlords?<\/h2>\n
Capital gains tax for landlords<\/h2>\n
Capital gains tax on property: the basics<\/h3>\n
Budget speculation for buy-to-let investors<\/h2>\n