Landlords who intend to sell their properties this year are being urged to act quickly ahead of the Capital Gains Tax allowance change announced in the Autumn Statement.
Chancellor Jeremy Hunt announced that the current allowance of £12,300 is being halved to £6,000 from April 2023 and then cut again to £3,000 from April 2024. That could mean an increased tax bill for many landlords planning to sell this year.
Andrew Parker, auctioneer and managing director at SDL Property Auctions, says CGT is charged on any 'gain' or profit you make when you sell or dispose of assets that aren't within an ISA. So - he says - landlords and second home owners are at risk of paying more come the new tax year.
Commercial properties may also be affected if you lease out any part of your property or use your home as a business premises.
Parker insists that sale by auction can help avoid the current open market completion times which can be as long as six months, and which come with a high rise of falling through.
He says: “By selling in an auction, you get a legal binding contract on the fall of the hammer with a fixed completion set for only 30 days later. That means if you sell this month or next, you can hand over the keys and have the proceeds in your account before the end of March - and thus eligible for the currently more generous CGT allowance.”
Parker insists that in a time of economic uncertainty, and with the market looking more heavily skewed against multiple property owners, auctions provide a secure sale at the best price.
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