Landlord Knowledge are running an article claiming that the anticipated Capital Gains Tax (CGT) increase will not apply to buy-to-let properties.

It can be seen here, and goes on to say that the decision helps prevent a feared mass sell-off of rental properties, which could have strained an already tight rental market. The government had been speculated to align CGT rates with income tax rates in the upcoming Budget, prompting concerns that many landlords would offload their portfolios to avoid higher taxes. Such an event could have temporarily boosted property sales but also worsened rental shortages and driven rents even higher.

The rental market, already struggling with rising rents and limited housing stock, would have been severely impacted by an exodus of landlords. Daniel Austin, CEO of ASK Partners, emphasized that while a sell-off could have provided a temporary increase in housing supply, the long-term consequences for tenants, particularly those unable to buy homes, would have been detrimental. Tenants like Sarah Williams, a nurse in London, expressed relief, noting that finding affordable rent is already challenging.

With buy-to-let properties excluded from the CGT hike, landlords are likely to seek other investment strategies, such as property debt strategies. These allow for financial efficiency by taxing returns as income rather than capital gains, shielding investors from potential future CGT increases. As these strategies gain traction, they may offer a new path for landlords to maintain their real estate investments without the tax burden of CGT.

This decision stabilizes the rental market in the short term, but landlords are encouraged to remain adaptable to potential future regulatory changes. For now, property debt strategies may provide a viable alternative for investors seeking to grow or maintain their real estate exposure.

This has also been reported in the Residential Landlord