An RLA recommendation – to reduce Capital Gains Tax (CGT) paid by landlords when selling their rented home to sitting tenants – is being proposed as an amendment to the Finance Bill
Clause 72 of the Finance Bill reduces CGT to 20% – except for the sale of residential property where the rate stays at 28%. MP Kevin Hollinrake is tabling an amendment, first mooted by the RLA, that would extend the new 20% CGT rate to private landlords when they sell their rented property to a sitting tenant.
Given the recent attack on the Private Rented Sector by Chancellor George Osborne the RLA believes more and more landlords will want to exit the market as renting becomes financially unsustainable for them.
However, RLA research found that 77% of private landlords would consider selling their property to tenants if the tax liability was reduced.
Mr Hollinrake says the amendment will support the Government’s home ownership agenda while at the same time offering landlords a route out of the sector minimising the financial hit.
The amendment also includes safeguards to prevent such a tax change being abused. He is now lobbying for support among fellow MPs.
The RLA will be asking members to write to their MP encouraging them to back the amendment, once tabled.
The Finance Bill will be debated in Parliament later this month.