Buying to let is bigger than ever – the private rental sector has doubled in size in the last decade and now makes up 13% of the Scottish housing market. But, as this year’s budget and the changes to Capital Gains Tax have shown, it’s not an easy time to be a landlord.
What you need to know
Chancellor George Osborne’s announcement that he would be significantly reducing the rate of tax paid on capital gains was good news for many investors – but not for landlords. Residential property was excluded from the tax cut, which kicked in on April 6th and sees investors in other types of asset benefit from the higher rate being reduced from 28 per cent to 20 per cent, while the basic rate has been reduced from 18 per cent to 10 per cent.
But there’s no such luck for landlords, who will continue to pay the existing rates. That 8% cut, if it had applied, would have shaved a whopping £13,000 off the tax bill for the sale of the average (£165,000) Scottish home. From April 2019 capital gains tax due on the disposal of any residential property will now have to be made as a payment on account within 30 days of disposal. Whether you’re a veteran landlord with a number of properties on your portfolio or are looking to invest in your first buy-to-let home, it’s just one more addition to the already lengthy list of things you have to keep in mind.
With the sector coming under increasing scrutiny from the Government, it’s more important than ever to know exactly what your rights, obligations and liabilities are. The good news is that you don’t have to tackle the ever-changing world of the private rental sector alone.
“Rental property can be a great investment, but, as any investor knows, there’s much more to it than bricks and mortar. Here at Harvey Lets, we draw on more than 60 years’ experience in the industry to make sure you stay one step ahead of changing legislation, up-to-speed on best practice, and equipped with the knowledge you need to make the most of your investment. Give me a call or pop in to the office for a chat and see how we can help.”
Call: 0141 204 1100