Capital gains tax 'will kill property market'

Date: 14th June 2010

Increases in capital gains tax will be "devastating" for the property sector, it has been suggested.

Alan Ward, chairman of the Residential Landlords Association, said that the proposed tax rise will deter investors from selling property.

It is expected that the coalition government will outline plans to increase capital gains tax from the current 18 per cent level to bring it in line with income tax.

This will "frustrate" the market and will "kill" investment in the sector, Mr Ward warned.

"If it is applied as we think it is at the moment, in other words as a flat tax, then landlords and investors will stop selling property," he added.

"Equally, it will have a detrimental effect on the improvement of properties. Landlords generally spend on a property when they first buy it, to improve it, to alter it, to bring it to their standards, and the major work is done at that time."

Posted by Thomas Fletcher