This has been brought about by the huge house price increases of recent years, something which has been a boon for ordinary homeowners but is currently posing a big problem for the buy-to-let market.
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Lee Grandin, director of Landlord Mortgages says: If a property shows considerable capital growth, landlords will generally remortgage to release some of the equity in order to expand their property portfolio.
While this allows them to spread the risk amongst a selection of residential investments, it does mean that if they choose to sell the property, they need to reclaim some of this equity to pay their CGT bill.
Careful financial management can go a little way to reduce this bill, but no matter how much planning an investor does, the CGT bill cannot be removed completely.
The government has announced plans to significantly increase the countrys housing stock over the next decade, but this will do little unless some form of relief is put into place.
Grandin continues: We propose that tax breaks are offered to landlords who sell their rental properties to first-time buyers or key workers. The relief could come in several forms either a reduction in the overall amount paid or an increase in the period over which the tax can be paid. We call on the government to work together to ease this burden
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