Buy-to-let remains a sound investment

23 Jun 2010

The rate at which the tax is charged on non-business assets has increased from 18% to 28% for higher earners, but not to the 40% that had been widely predicted.

Many landlords feared that a sharper rise in CGT would deter new landlords from entering the buy to let sector and affect the future supply of rented housing, especially at a time when the UK is experiencing a housing shortage.

But MD Graham Kinnear believes that, with the increase not as bad as first thought, property investment will remain a sound financial proposition.

He says: “The property investor needs to be encouraged to build and grow a portfolio, and a tax system whereby one party takes all the costs and risks and yet the other takes half the profit is clearly unfair. Whilst any rise in CGT is inevitably a blow to landlords, we are delighted that the financial incentive for property investment remains.”

“Landlords tend to enter the buy to let market knowing that property is a long-term investment rather a short-term gain. We do not believe that this rise in CGT will cause too much disruption to the sector.”

Stephen Parry, Commercial Director agrees “It is widely acknowledged that some tax increases were inevitable given the size of the deficit so we are pleased that these have been moderate to acknowledge the need for investment in the property sector.”

Source: Property Talk Live

Lucy Taylor
Associate Director - Head Office
01865 760055 / investments@scottfraser.co.uk