Beating the winter budget

High-end homebuyers and second-property owners may be able to sidestep potential tax threats in the pre-Budget report in December by taking action now
High-end homebuyers and second-property owners may be able to sidestep potential tax threats in the pre-Budget report (PBR) on 9 December 2009 by taking action now, suggest accountants.

Estate agents and lenders are pushing for a longer stamp duty “holiday” on homes under £175,000. But any further concession could come at the expense of an increase in stamp duty from four to five per cent for £500,000-plus properties which may take effect from the PBR.

Buy-to-let threats: for landlords selling off buy-to-let investments that are subject to capital gains tax (CGT) exchange contracts without delay. CGT was reduced to a flat 18 per cent last year, but could be pushed up to 25 per cent or higher. It could even be worth increasing a mortgage on a buy-to-let before the PBR, in case tax relief on loan interest is scrapped on new loans.

Flipping, MP-style: “flipping” of homes to avoid CGT could face a clampdown. Owners of two or more properties who haven’t yet registered for this tax break should do so before 9 December. By nominating a second home as your “principal private residence” (PPR) temporarily the property becomes CGT-free for the three years of ownership before its sale.


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