Suggested panic selling by landlords fleeing the increase in CGT was averted today following the Chancellor's announced in his emergency Budget that this capital tax would rise to only 28%.

This new threshold, effective from midnight 22nd June 2010, is far less than the 40% speculated to be introduced in the next tax year.

This pre-emptive measure prevents landlords selling off investment property before a CGT rise could take effect. 

The Chancellor said, the coalition Government explored the possibility of increasing CGT above 28%, but that such a move would have created fewer returns and taper relief was too complex to administer and would become self-defeating.

Stuart Law, Chief Executive of Assetz, said, Osborne's CGT increase to 28% remains lower than the rates we had three years ago, of up to 40%, before Labour introduced the 18% rate. This move is not likely to have a negative impact on the UK property market as speculative investors are unlikely to sell off their buy-to-let property once this new tax rate is introduced at midnight tonight. Professional property investors are generally looking at the long-term benefits and see the importance of the regular income rather than short -term capital gains.

 

What We Say ~ The old maxim Tax Deferred is Tax Saved  is as true today as ever was! Building a property portfolio should be viewed as a medium to long term investment opportunity, enjoying above average incomes from rents along the way. BMV property remains the most tax efficient way to buy property!

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The latest figures from Nationwide Building Society reveal that average prices rose by 1.0% in April, bringing the annual rate of increase to 10.5%, the highest level recorded since June 2007.  

This means the rate of UK house price inflation has entered double figures for the first time since the global credit crisis began with the average UK property now being worth just under £168,000.

Nationwide warned however, that these healthy gains are likely to lose ground later this year, as the number of sellers coming to the market starts to outstrip the number of buyers.

Martin Gahbauer, Chief Economist said, "There has recently been evidence of a slight shift in the supply-demand balance. While the recovery in new buyer enquiries at estate agent offices appears to have petered out, the last few months have seen an increase in the level of new instructions from sellers. All else equal, this should lead to a gradual flattening out of the recent upward price momentum".

Nationwide' three-month over three-month figures, report that average property prices increased by just 1.1% between the end of January and the end of April. And, much of the annual increase was down to gains made when the property market rebounded in 2009. 

The subdued growth in property prices so far this year is attributed to a number of factors including: the increase in supply of available properties; and, uncertainty regarding the imminent General Election.

Source: Media4Property

What We Say ~ Whatever the state of property prices on a given day, Below Market Value purchase is by far the least expensive way of acquiring additions to your portfilio. Estate Agents only market at or very near open market value.  Auction Houses require full cash purchase on the day with any lender securing your purchase funds against an existing asset.  Only BMV will accomodate maximum BTL loan-to-values against the asset being purchased. Where else can you purchase property for under £10,000 all in?  

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From mid-night tonight (24/3), First Time Buyers will enjoy NO STAMP DUTY LAND TAX on house sales up to £250,000!!!!

This is great news for our listing agents and for investors with sons and daughters looking to get onto the property ladder.

In his pre-Budget report last December, Alistaire Darling said the SDLT holiday would not be extended beyond the end of 2009: a holiday that had increased the threshold at which buyers paid SDLT from £125,000 to £175,000 between September 2008 and December 2009.

The Council of Mortgage Lenders estimated that if this new £250,000 threshold had existed in 2009, a wapping 92% of FTB's and 69% of home-movers would have been exempt.

The CML also predicted that c.350,000 households (including cash buyers, not just those with mortgages) could benefit over the rest of 2010, at a cost to the Exchequor of around £630M. To make up the loss however, SDLT on properties over £1-million will increase to 5%.

 

In an attempt to stimulate the current housing market, FTB's will enjoy this exemption until the end of 2011.

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1. Stamp Duty Land Tax 'Holiday' to end 31st December '09, returning threshold to £125,000 (down from £175,000)

2. Home Owner Support extended a further 6-mths

3. Inheritance Tax 0% threshold held at £325,000

4. VAT to return to 17.5% from 1st January 2010

5. Empty Property Relief extended to 2011

6. Bankers' bonuses over £25,000 will be subject to a one-off 50% tax deducted by the employer

7. Basic State Pension will rise by 2.5% in April

8. The Chancellor expects a return to growth in Q4 but admitted that over 2009 as a whole, the UK economy is expected to have contracted by 4.75%

Source Mortgage Solutions

What We Say ~ 

1. This was a saving of £1750 i.e. 1% up to £175,000 (not massive, but significant)

2. Chancellor claims 220,000 'people' helped to date (less than 1% of current unemployed)

3. Threshold could have risen by £25,000 effectively saving £10,000 of death tax against an estate value of £350,000

4. Adds back 2.5 pence in the pound to VATable purchases

5. Applies to non-residential property only

6. Board to Banker says, "I suppose you could pay the £487,500 tax on your million pound bonsus for this year or we could pay you £25,000 and hold over your £975,000 until next year.  What do you say?"

7. Up to £3.80 for a married couple

8. I'm lost for words!

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