The government should use today's ‘Tax Day’ consultation process to reform Capital Gains Tax so that it encourages a smaller, high quality and lower leveraged buy to let sector.
That’s the view of prominent estate agency owner Dominic Agace, chief executive of Winkworth, with 100 offices nationwide.
He makes his comments on ‘Tax Day’ March 23, designated by the government as the opportunity to issue a series of consultation documents on long-term reforms. Several rental industry figures warn that proposals to change CGT - advocated by the Office for Tax Simplification - could damage the sector if it disincentives landlords.
"The concern with Capital Gains Tax is that changes will go too far” says Agace.
“Even with the support the government has given to first time buyers, I don’t believe this is enough to provide the range of homes and tenures needed if you remove investors from the property market.
”In my view, rather than the removal of all buy to let, the aim should be to create two million new homeowners but retain a perhaps smaller, high quality, lower leveraged buy to let sector, providing flexible living choices in the property market.
“Build To Rent is not yet ready to provide the numbers of homes needed and the scale of the projects does not provide the choice the private rental sector currently offers. We need a balance, giving opportunities to first time buyers and a quality buy to let sector - not a blunt choice between one or the other."
Jesse Norman, financial secretary to the Treasury, has told MPs in a letter: “The goal of making these announcements separately to the Budget, but still all on a single day, is to give a range of important but less high profile measures greater visibility among, and opportunity for scrutiny by, parliamentary colleagues, tax professionals and other stakeholders.”
The government has made it clear that today’s announcements will not be for tax rises in the current year - but has made no commitments about 2022 onwards.