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repeal laws on capital gains tax on second properties

Comment 16th July 2010

My idea is that owning a second home, is generally the result of hard work and considerable risk.  If I have put in the effort of making the money to buy a second/third whatever number of homes, I should be allowed to sell it and make profit on it.  I agree to some taxation on it, but I feel the amount of tax payable on the Captial Gains, should diminsh over a period of time.   

Why does this matter?

18% CGT on a second property was fairly reasonable. 10% woud be so much better.

In order not to stagnate the property market and to allow those who have bought the second home to sell a property and release equity as and when required, then the amount of CGT payable if diminishing lets say over a period of 5 years, would make it worthwhile for those who invested.

I have a second home, which was purchased during the "boom".  The house was purchased at £210k and is currently valued at £135k. In NI. reland, in my area, rents for this house are around £450pcm – this is exactly what was being obtained when I| had my first home way back in 1996!!!!  Rents are not increasing and at this period in time, just about cover the rates bill.

If I get a tenant who breaks his lease and stays only 2 months, I have got to re-paint the entire home, have it professionally cleaned i.e carpets etc , I have to pay the agent one month's rent to find another tenant and am in a constant catch up situation. My mortgage goes on and I have to find the money elsewhere to meet it   and meanwhile nothing is selling.

To add CGT, to any possible chance of making the whole thing in any way viable, is just not right.

If I were to suffer on with my current property,curreently at the end of 5 years, I will not be anywhere near a situation of breakeven.

Buying a second property and stimulating the property market, while prices are at these lows, is just not a viable proposition for anyone who wants to do this to make a pension pot for themselves. Any possible capital gains is just being taxed away. 

Whether I live in my second home, as a holiday home, or rent out, the cost of the mortgage and the cost of repairs and maintenance remains always.  The idea is great in a rising market, but for the foreseeable (and some predict stagnation in the property marekt for 10 years) it just makes no sense whatsoever to invest in a second property.

 

What then should those of us who are self employed do about getting ourselves a pension and trying to be self sufficient?  Once again the tax system penalises those who are trying to better themselves and to look after themselves in their retirment years.

 

The current CGT on a second property is yet another noose around my neck.


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