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Conservative Party Pledges CGT Exemption for Landlords in New Manifesto

The Conservative Party is set to unveil its latest manifesto today, featuring a significant pledge to eliminate capital gains tax (CGT) for landlords who sell their properties to sitting tenants, as reported by the Daily Telegraph.

This exemption, designed to stimulate the housing market and facilitate homeownership for renters, will be available for a two-year period. Notably, it will not apply to primary residences, which are already exempt from CGT. The policy stipulates that the tenant must have been renting the property before today’s date to qualify for the exemption.

Prime Minister’s Statement

Prime Minister Rishi Sunak is expected to address the nation, emphasizing the difficult financial decisions necessitated by the Covid-19 pandemic. “We Conservatives have had to take difficult decisions because of Covid,” Sunak will say. “But we are now cutting taxes for earners, parents, and pensioners. We are the party of Margaret Thatcher and Nigel Lawson, a party, unlike Labour, that believes in sound money.”

Sunak will underline the party’s commitment to rewarding hard work, stating, “In this party, we believe that it is morally right that those who can work do work, and that hard work is rewarded with people being able to keep more of their own money.”

Limited Impact on Landlords

The CGT exemption is projected to cost approximately £20 million, suggesting a limited impact, with the average landlord saving around £21,000. The measure is part of a broader strategy to alleviate the housing crisis and reduce the tax burden. However, the exact number of landlords expected to utilize this benefit remains uncertain.

Broader Economic Plans

In addition to the CGT exemption, Mr. Sunak will promise further tax relief for 27 million households if the Conservatives are re-elected, including a 6% reduction in employee National Insurance. The manifesto also heralds the return of the Help to Buy scheme, and proposes that first-time buyers will be exempt from stamp duty on properties valued up to £425,000.

Industry Response

Nathan Emerson, CEO of Propertymark, responded positively to the tax break concept but called for broader support for the private rental sector. “Propertymark welcomes the concept of tax breaks, and we would like to see more support for homeowners. However, if the Conservatives are serious about supporting the private rental sector to grow, then they need to reverse the changes to mortgage interest relief and reduce the amount landlords pay when purchasing a buy-to-let property,” Emerson stated.

The Conservative Party’s manifesto, with its mix of tax cuts and housing market incentives, aims to address some of the most pressing economic issues facing the nation, promising relief for both homeowners and renters.

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