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TODAY'S OTHER NEWS

Buy-to-let gets Budget "kick in the teeth"

Chancellor George Osborne's eighth Budget delivered another blow to buy-to-let investors by excluding property from cuts to capital gains tax (CGT) rates.

Investors are still reeling back from Osborne's previous assaults on the sector, including the 3% stamp duty surcharge on second properties, phasing out higher rate tax relief and eroding wear and tear allowances.

Yesterday he cut higher-rate CGT from 28% and 18% and basic rate CGT from 18% to 10%, with both changes coming into effect on 6 April.

But these new lower rates will not apply to residential property sales as the Chancellor said he wanted to “provide an incentive to invest in companies over property”.

Steve Bolton, founder of Platinum Property Partners, said this was a blow to both homeowners and landlords. “The targeted punishment of landlords is astounding.”

He said this confirmed that landlords are not valued by the Government, even with rental demand at an all-time high.

“While landlords are battered by higher costs, those renting out property online, for example, through Airbnb, are set to enjoy a £1,000 tax break.”

First-time buyers needed support but attacking landlords and forcing them to increase rents or constrict property supply was the wrong way to do it, Bolton said.

David Cox, managing director of the Association of Residential Letting Agents, said yesterday's Budget was the third to directly attack landlords.

“The sector has been punitively taxed, with stamp duty on buy-to-let properties, mortgage interest relief and now CGT changes. It’s an outright assault on the sector.”

Cox said every other sector has been offered a tax break. “Yet there is nothing here to help the private rented sector, including landlords - and most importantly tenants - who will see rent costs rise to subsidise the taxes that landlords pay on property.

“The Government talks about wanting to help the younger generation get onto the property ladder, but with the changes announced today the supply of available property is bound to decrease, and as a result rents will rise.”

Russell Quirk, eMoov founder, said the budget was "very disappointing" for the property market and excluding second home sellers from CGT reductions was a "kick in the teeth".

“This was hardly a budget to assist hard working people with more than one property, not to mention Mr Osborne’s total failure to address the issue of housing supply that has been touched upon in previous budgets.”

Jeremy Duncombe, director, Legal & General Mortgage Club, was relieved the Chancellor didn't heap further taxes on the buy-to-let sector.  

“The changes to this market made by George Osborne in 2015 can now be given time to bed in, allowing us to see whether they will actually achieve their goals.”

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