Capital Gains Tax Cut Could Affect Rural Housing Costs
The pressure is on for The Chancellor Alistair Darling to act upon preventing significant cuts in CGT (Capital Gains Tax) as it could trigger a second-home boom.
The Government’s Rural Advocate, Stuart Burgess appealed to abandon the plans for the reduction in CGT on second homes from 40 per cent to 18 percent. Active campaigners and opposition MPs have also warned that property speculators could potentially use could take advantage of the tax reduction to control the price of rural housing.
Stuart Burgess expressed he was dissatisfied at the CGT cuts and suggested setting up a new fund to invest in local housing funded by council tax on second homes. He said:
In some rural areas the proportion of second homes is very high. This can significantly affect local housing affordability and the sustainability of communities.
Kate Gordon - a spokesman for The Campaign for the Protection of Rural England (CPRE) – said:
Property in rural areas should go to people in housing need. There is a large shortage of affordable housing at the moment. Reducing this tax will lead to a wave of speculation and it could fuel further price rises.
The Chancellor needs to assess the implications of these changes and we are not sure he has thought this through properly.
The CPRE advised the tax cuts could get more people out of the housing market.
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