PayProp: Spending review fails to address stamp duty and CGT concerns
Neil Cobbold (pictured), chief sales officer at PayProp, has noted that Chancellor Rishi Sunak did not address the impending end of the stamp duty holiday in March, or the proposed changes to Capital Gains Tax (CGT) in the government spending review.
Cobbold said: “Understandably, today’s spending review focused on funding for public services in light of the ongoing COVID-19 pandemic, even if the property industry had hoped that the Chancellor would use the address to provide clarity on issues such as the stamp duty holiday and proposed changes to Capital Gains Tax (CGT).”
He added that recent weeks have seen numerous calls for the stamp duty deadline to be extended to prevent a cliff-edge in the property market in Q1 2021.
Cobbold said: “A longer period for property buyers to benefit from significant tax savings would provide the market with a welcome boost as we approach the New Year and the effects of record-breaking sales volume this summer start to wear off.
“A stamp duty holiday extension would also encourage further investment in the private rented sector (PRS), potentially leading to much-needed new homes for tenants entering the market.
“Meanwhile, it appears the government is still reviewing the recent proposals made by the Office for Tax Simplification to double CGT rates and lower the number of exemptions.
“It seems unlikely that a decision on this proposal will be made in the near future as the government’s focus remains on managing the impact of the pandemic.
“However, if changes to the CGT system are made in the future, due consideration should be given to the impact they could have on buy-to-let landlords and property investors.
“Doubling CGT rates could have the unintended consequences of a mass buy-to-let sell-off and less future investment in the PRS. The government needs to raise revenue to fund its response to the pandemic, but it can strike the right balance without severely affecting sectors like the PRS which provides homes for millions of people.”