In Today's UK Budget, Chancellor George Osborne announced that Capital Gains Tax is to be reduced significantly. But the Chancellor said that Residential Property is EXCLUDED, meaning that residential landlords could pay up to 8% more in tax than commercial property owners when they come to sell.
Capital Gains tax will reduce from 28% to 20% at the headline rate and from 18% down to 10% on the basic rate. The chancellor made it clear this afternoon in his speech that this reduction excludes residential property.
Investors buying commercial property such as Purpose Built Student Accommodation and Hotel Rooms will however benefit from this 8% reduction, as well as already being immune from the 3% second-property stamp duty surcharge that buy-to-let investors now have to pay when they buy.
So when our investors come to sell their property they will stand to save up to 8% of the sale price in tax.
Another black day for Buy-to-Let
This comes as a further death-blow for support for buy-to-let residential landlords from the government. Residential Landlords already face very significant income tax increases from next year.
We now expect to see a further significant shift of property investors from purchasing residential to buying commercial property, and HighGround are well placed to meet this demand.
The residential assault continues - its no joke
Many had hoped that the buy-to-let Stamp Duty surcharge of 3% starting on April Fool's day this year would only apply to landlords with less than 15 properties. But no, it was announced today that there will be no such limit. We're all in this together it seems.
If you have not considered affordable commercial property investment, perhaps now really is the time. Our expertise in sourcing fully managed commercial property gives us a unique perspective.
I welcome your comments and for a one-to-one chat about how we can save you money when you buy and sell investment property, book a call with me here. (You should of course also speak with a qualified tax adviser as your circumstances will be specific to you).
One perfect example of where you could save tax when you buy (no stamp duty for commercial property purchased at under £150,000), when you sell (lower capital gains tax) and while you own investment property is our flagship student property investment, Northgate Point. Commercial purpose-built student property as this already has key advantages over residential Buy-To-Let, and now these financial benefits are even more clear.