Potential tax changes on the sale of property

With the prospect of an Autumn Budget fast approaching, HMRC are now considering plans to raise money from a tax on the sale of homes worth more than £500,000, according to a report in the Guardian newspaper. If adopted, the new levy would be paid by owner-occupiers when they sell a home worth more than £500,000. The amount would be based on the property's value, with the rate set centrally and collected by HMRC. This is in addition to rumours already circulating that the capital gains tax rates may change. 

The South West rural property market is currently seeing a mixed bag of trends. While some areas, particularly those with strong demand and lifestyle appeal, are experiencing price growth, others are facing challenges with slower sales and price reductions. Sellers are needing to be realistic on price with buyers being more discerning and these rumours to changes in taxation could distort the already volatile rural property market. 

Top Tips

1. Engage your legal team early - paperwork can slow down a sale, so engaging with your legal team to collate all the documents required for the sellers' pack will help to facilitate a smooth transaction process;
2. Keep in regular contact with your estate agent and solicitor. If problems do occur with the sale, a skilled solicitor will know how to solve these to get everything back on track and to help mitigate any foreseeable risks;
3. Take advice on the potential tax payable and ways to structure the transaction in a tax efficient way. 

For those wishing to stay ahead of any changes and exchange on their sale/purchase before the Autumn Budget need to do engage their legal and accountancy teams sooner rather than later.