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Flipping Property To Be Made More Difficult By Government

Flipping Property To Be Made More Difficult By Government

Flipping Property To Be Made More Difficult By Government
In A Bid To Boost Revenue

In the week when I have just purchased my first property to flip, the UK Government announced that they are planning to crack down on the profits made by property developers and property investors who flip property.

The Government want action due to the demand for housing greatly outstripping the supply to market and they want a slice of the revenue that they feel the country is missing out on. This could greatly affect my business plans, so I thought I would examine the issue in more detail:

Flipping property is considered by Government to be the process of changing your main residence before selling a property in order to avoid paying capital gains tax (CGT).

However, as many property people will tell you, “flipping” is buying a property at one price and reselling it again within a relatively short time frame (6 month rules apply) at a higher price, whether you have done any work to improve the property or not.

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2 Million Foreign Investors Own UK Properties

2 Million Foreign Investors Own UK Properties

Foreign Property Investors Think UK Property Is A Safe Investment

According to the accountancy group – UHY Hacker Young, the number of foreign property investors owning UK property has now exceeded 2 million.

The accountancy group analysed HMRC data and discovered that the number of overseas property investors owning and renting out property in the UK private rented sector increased by 6% in the past 12 months to 2.04 Million, up from 1.93 Million in 2012.

In the past five years the number of foreign property investors owning UK PRS property has risen by 39%.

However, the accountancy group says that the consistent growth in the number of foreign investors targeting UK property may come to a halt following the Government’s recently announced plans to charge Capital Gains Tax (CGT) on the sale of properties owned by foreign investors from April 2015. A move which could discourage foreign buyers from investing in UK property when the deadline comes in to force.

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Capital Gains Tax For International Property InvestorsUK To Tax International Property Investors

The Chancellor, George Osborne’s has taken a step towards levelling the playing field for UK property investors after deciding to introduce Capital Gains Tax (CGT) for international property investors, a move that has attracted a mixed response from property professionals.

While UK property investors have broadly welcomed the new tax for international property investors, some industry professionals have slammed the Chancellors decision to introduce it, with some pundits speculating that it could drive foreign investors away, increase housing supply and push property prices down.

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ARLA calls for more investment in UK buy to let

ARLA Calls For More Investment In UK Buy-To-Let Property Rental Market

The Association of Residential Letting Agents, (ARLA), have urged the Chancellor of the Exchequer, George Osborne, to use the forthcoming Budget to encourage more investment into the UK’s Private Rented Sector, (PRS).

ARLA have called on the UK coalition Government to support the observed growth in the UK Buy-To-Let sector and remove many of the prohibitive barriers to further investment.

ARLA’s Budget submission calls for landlords to be treated as running businesses for Capital Gains Tax purposes, for the introduction of roll-over relief for landlords looking to reinvest, and for UK Stamp Duty to be made fairer.

UK landlords currently have to shop around for a wide range of landlord services in order to help them save money and operate as a business. The emergence of Tenant Referencing and Tenant Eviction services and the development of specialist Landlord Insurance products have ensured that there is still money to be made, by UK landlords, from the UK PRS rental market.

ARLA’s Operations Manager Ian Potter, said: “Buy To Let landlords must be treated as the entrepreneurial businesses they have now become. Supporting growth and encouraging greater investment into the private rented sector will help boost our economy and is an open goal for the Chancellor. Demand for private rented housing continues to grow, with 3.4 Million tenants living in the private rented sector – an increase of over 1 Million tenants since 2005. The tax system can be used by the Government to incentivise investment in housing stock in the PRS, and therefore improve the conditions in which those 3.4 Million tenants live. Some landlords face tax bills of up to 28% when selling a property, preventing them from reinvesting in the market.”

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