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Tuesday, June 22, 2010

RICS - CGT deters BTL

The Royal Institution of Chartered Surveyors said 72% of its members thought increasing CGT from its current 18% to 40% or 50% would deter people from investing in rental property.

Chris Horne Editor of leading landlord website Property Hawk disputes this:

"If we look at the biggest boom in residential investment during the late nineties and the 'noughties' this occurred at a time when CGT was at potentially 40 or 50 %"

"Admittedly, this tax regime was accompanied by a system of indexation which reduced the amount of CGT payable the longer a landlord held their property for."

"Investing in residential investment should be considered a long-term investment & not just about investing to make a huge capital profit. It is as much about securing a long-term income stream & clearly any reduction in income tax will reduce the tax paid by a landlord on any rental profits."

"At the end of the day there are many ways a landlord can 'avoid' paying CGT on disposal of their rental property. They just need to be 'creative' and have good tax advice."

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