Labour was quick to dismiss the tax could go this high. This week, Sir Keir Starmer refused to rule out increasing capital gains tax but said speculation that it could rise to 39pc was “wide of the mark”.
Yet any increase would have been damaging for property investors after years of government intervention that has eaten away at profits.
Nearly two thirds of buy-to-let owners view being a landlord as a long-term pension investment, according to the Government’s most recent English landlord survey.
The income comes either through selling properties for the lump sum to live off or buying an annuity, or by saving the rental income to their pension.
It is understood that there are around 2.8 million landlords, and analysis from estate agency Savills shows that retirement-age households own 1.5 million buy-to-let properties.
Chris Norris, head of policy for the National Residential Landlords Association (NRLA), said a spike in property investment at the turn of the century had coincided with a spate of pensions scandals – including Maxwell’s Mirror Group – that knocked public confidence and led to more savers turning to bricks and mortar.
He said: “If property capital gains goes up to 39pc more than doubling of the basic rate, that is going to significantly hit landlords who I think we have to bear in mind aren’t making enormous amounts. It’s the difference between a decent income for 15 years versus three or five years.”
For higher-rate taxpayers, matching CGT with income tax would have seen them lose nearly half of their gains from the sale of the property. If they made £30,000 on the sale of their second property, the tax bill would have risen from £6,480 to £12,150, according to wealth manager Evelyn Partners.
