In a move to support the housing market, at the Budget the Chancellor cut capital gains tax on sales of second homes and additional residential properties to 24%
This will see a reduction in the current higher CGT rate from 28% to 24% from April 2024, which will affect owners of second homes and buy to let landlords selling their non-residential property.
This measure is designed to raise revenue and boost the availability of housing by encouraging residential disposals.
The lower rate will remain at 18% for any gains that fall within an individual’s basic rate band.
There are also some important timing issues to note.
Richard Hanley, senior tax manager at Mercer & Hole said: ‘It is worth noting that the relevant date for CGT on residential property sales is the date that contracts are exchanged on the property.
‘The reduction will therefore only apply to properties that exchange on or after 6 April 2024, and not properties that exchange before this time but complete afterwards.
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