Capital gains tax is 'not fair on buy to let landlords'

01 June 2010

Written by David Whittaker

Buy to let landlords will be negatively affected by capital gains tax, it has been suggested.

According to the Daily Telegraph, the current levels paid on the duty of 18 per cent will be punishing to portfolio owners when they come to sell property.

Should the government increase the rate to 40 per cent or potentially as high as 50 per cent, those approaching retirement will not earn the returns for which they have planned and will have to continue in work until a later age, the newspaper said.

Financial experts told the publication that it is "inherently wrong" to apply similar rates to that of income tax to private investments.

"It is one thing putting up tax rates, but it is fundamentally unfair for inflationary gains to suffer tax at income tax rates," Mike Warburton of Grant Thornton accountants told the news provider.

The sector has already been suffering due to the housing slump brought on by the recession, when house prices sank more than 16 per cent, from which the property market has still not fully recovered, the information source said.

Recently, both the Association of Residential Lettings Agents and the National Landlords Association called for buy to let landlords to be excluded from any rises in capital gains tax.

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