Comment: buy-to-let CGT hike concerns

Commenting on buy-to-let CGT hike concerns despite earlier reassurance, Daniel Austin, CEO and co-founder at ASK Partners, said:

 
“Reports that the expected increase in Capital Gains Tax (CGT) will not include buy-to-let properties was initially welcomed, however, the market remains concerned. The wave of private landlords selling off properties in response may offer a short-lived upside in property supply. While this could temporarily level out property prices, the impact on the already strained rental market will likely be far more severe. With fewer rental properties available, the existing supply shortage will deepen, pushing rents even higher, exacerbating the affordability crisis for tenants. Those at the bottom of the housing ladder—who are unable to secure mortgages or afford deposits—will bear the brunt of these soaring costs.

“From an investment standpoint, private landlords who have already decided to sell their property portfolios will have significant capital available for redeployment. Even those initially planning to reassign this capital may now be exploring alternative real estate investment opportunities. Property debt strategies, which have been continuing to gain traction, present a compelling alternative. These strategies allow investors to avoid CGT on interest received, as the returns are taxed as income rather than capital gains, providing an added layer of protection from any potential future changes to CGT rules. If CGT liabilities were to increase, more investors could turn to these flexible, income-based strategies, offering both financial efficiency and continued exposure to the real estate market.”