Capital Gains Tax Changes: What it means for sales of second homes

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The Spring 2024 budget, announced Wednesday, 6 March, has cut the Capital Gains Tax rate on residential property disposals.

The change, which starts on 6 April 2024, means that individuals, trustees, and personal representatives who are liable to pay higher Capital Gains Tax rates on residential property gains will be able to keep more money from property sales.

The cut from 28% to 24% aims to incentivise disposal of second homes, buy-to-let property, and other rental property.

What Is Capital Gains Tax?

Capital gains tax (CGT) is a tax on the profits made when selling an object that has increased in value.

Not every property sale is liable for GCT: If you purchase a home to profit from it, you’ll likely pay GCT. But, if your property is your home, you’ll benefit from Private Residential Relief. Other properties may also be exempt from the tax.

The amount of Capital Gains Tax you may pay will be affected by:

  • The value of the property you are selling
  • The length of time during which you’ve owned the property
  • What your personal tax circumstances are

From 6 April, the Capital Gains Rates will be:

  • 18% for lower rate CGT
  • 24% for higher rate CGT (down from 28% higher rate CGT)

To gain an accurate estimation of what you might pay after selling your property, visit the Gov.UK Capital Gains Tax Calculator.

What This Could Mean For You?

If you’ve been considering selling your rental property, the best time is now. Waiting too long could mean that demand for properties like yours decreases as more homes enter the market – this may affect on market prices.

Selling Your Home Might Not Be As Easy As You Think

Selling a rental property can be difficult, particularly if the interested buyers are not applying for a buy-to-let mortgage. Traditional mortgage lenders do not often want to gamble on tenanted homes due to the legalities involved with potential evictions and ensuring vacant possession.

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Why Sell With Jennings And Barrett

With over 110 years in the property industry, we’re experts in all aspects of rental and lettings management – including sales of rental properties.

We’ll prepare your home for the market per your instructions, whether you intend to sell before or after eviction, and give you the best advice to sell within your desired timescales.

If you’re after a fast completion, we may advise you to sell your property using modern auction. The modern auction process can provide you with the speed and confidence of sale that you’re looking for while enabling potential buyers to conduct the same level of due diligence that they’d apply to a regular sale.

Our sales services are managed in-house from beginning to end. From marketing to sales progression, we provide a conscientious service centred around your needs, with one goal: to find the right buyer at the best price for your property.

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Find out more

As local, professional, and independent agents, every sale matters. Talk to us today to book your free market appraisal and get started.