Capital gains reforms 'save landlords money' - buy to let mortgages

29 August 2008

Changes in the capital gains tax (CGT) system introduced in April have led to big savings for landlords, according to The Mortgage Works.

Research by the lender has shown that people who sold their buy to let properties in the second quarter of this year paid half the amount in CGT of those who sold prior to the reforms.

In the first quarter, the average total tax burden for houses was £41,742, whereas in quarter two this was reduced to £24,454.

The figures for flats show a similar decline, with total CGT being lowered from £46,423 to £19,494 on the average property.

Those who bought outside of London and the south-east enjoyed the biggest tax decreases, the report added.

Managing director Andy McQueen said: "While house prices might have slowed recently the outlook is still promising and those with investment properties now should be encouraged to continue renting them out instead of selling."

The Mortgage Works recently announced a new range of buy to let mortgages with rates from 5.09 per cent.