Landlords retain property despite tax cut

Few buy-to-let landlords will take advantage of this month\'s Capital Gains Tax cut, says a Royal Institution of Chartered Surveyors report.

Despite the flat 18% rate, which was introduced on April 6, the report claims just 2% of landlords are now planning to sell properties on the expiry of tenant leases.

The RICS Interim report was based upon feedback from its members on whether landlords are now seeking to take advantage of the more favorable tax treatment.

Simon Rubinsohn, RICS chief economist, says: “Fears that landlords would take advantage of the more favourable Capital Gains Tax regime to bail out of the buy-to-let market appear misplaced.”

He says: “Significantly, with the reduction in LTV ratios by lenders leaving first-time buyers struggling to access the housing market, rents are now rising sharply and the expectation is that this trend will continue.”

Previously property sales by landlords would have incurred CGT of between 24% and 40%, dependant on how long they maintained property ownership.