Get ready for a property market shake-up as landlords are rushing to sell their rental properties before the upcoming general election.

The rumour mill is churning with whispers of potential capital gains tax (CGT) hikes, leaving landlords jittery and seeking to avoid a potential tax bombshell.

A Rush to Sell

Experts are reporting a dramatic rise in the number of landlords putting their properties up for sale. The data doesn’t lie:

• 28,000 rental homes were listed for sale in June, double the number from the same period last year. This suggests a significant shift in landlord sentiment.
• One estate agent saw a fivefold increase in BTL sales from their clients this year.

Why the Panic?

While Labour’s manifesto hasn’t specifically addressed CGT, their leader has hinted at potential reforms. Landlords are understandably nervous about what this could mean for their pockets.

Possible Tax Changes

• CGT Increases: A 10% increase in CGT rates could earn the Treasury £2 billion. While Labour hasn’t confirmed any specific plans, the possibility of higher taxes is enough to send shivers down the spines of many landlords.
• Inheritance Tax Relief: There’s also concern about a potential clampdown on inheritance tax relief for business assets, which could hit wealthier landlords hard.

Weighing the Risks

While some landlords are rushing to sell, others are taking a more cautious approach. The fear of crystallising gains unnecessarily if tax rates don’t actually rise is a major consideration.

It’s a tough call for landlords:

• Sell now and potentially dodge a higher tax bill, but miss out on potential future returns.
• Hold onto their properties and risk a higher tax bill later, but potentially benefit from future rental income and property value growth.

The Future of the Market

The coming months will be crucial for the property market. Will the election lead to a wave of landlord sales, or will investors hold firm? Only time will tell, but one thing is clear: the market is on edge.