Apparently new figures suggest that the Capital Gains Tax Allowance threshold cut may be the cause of a 13 year high in landlords selling off properties.

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The Chancellor’s Autumn Statement included the incoming capital gains tax threshold changes over the next two years, from April 2023 the threshold when capital gains tax starts to be paid falls from the current £12,300 down to £6,000 and the following year from the £6,000 down to £3,000 on April1st 2024.

Tom Cranenburgh of an estate agency says this is the last straw for many landlords who have sold off properties and will be doing so, he says: “The changes to Capital Gains Allowance couldn’t really have come at a worse time for landlords. Right now many are already facing a reduction in property values, rafts of new regulation and the prospect of many of their tenants struggling to pay their rent due to the cost of living crisis.

“That’s why many are reacting to this unwelcome blow by already opting to quit the market and sell up.”

Cranenburgh adds: “We track all enquiries really carefully, and landlords looking to sell are coming to us more than I can remember since we began back in 2009. Some are hoping to sell with tenants remaining, others have given two months-notice and want the place sold as soon as it’s empty to avoid paying all the costs with no rent coming in.

“Landlords looking to sell are up nearly 65 per cent in November versus October and nearly 300 per cent versus November 2021.”

Currently basic rate taxpayers pay 10 per cent CGT on the majority of asset sales and 18 per cent on property, higher rate taxpayers pay 20 per cent on most assets and 28 per cent on property.

A rate investment platform says landlords who pay higher rate tax from April next year until April 2024 will have to pay an extra £1,764 when the CGT allowance threshold is reduced to £6,000 and as much as £2,604 more when the threshold is further reduced down to £3,000 the following year.

Those landlords paying basic-rate tax will have pay up to £1,134 more in CGT if selling a property between April 2023 and April 2024, and as much as £1,674 extra from April 2024.

Landlords who have ‘become’ companies taking dividends as pay will also have extra tax to pay as the Chancellor has made changes to dividend allowances starting from April 2024, which the current  tax allowance threshold allowance on dividends is £2,000 per year but from April next year will be cut down to £1,000 per year and down to £500 from April 2024.