Although this increase was recorded before news of the CGT increase broke, it is expected that the upward trend will continue as homeowners rush to beat the rise. The scrapping of Home Information Packs is also expected to increase the number of properties on the market.
But analysts are concerned about the medium-term impact of these jumps in new instructions. If there is a rush of sales before the increase, the likely effect is a significant drop immediately after the change. This could easily cause the property market to stagnate further.
Although Capital Gains Tax is not levied on the sale of a main home, it is thought that many of the properties appearing on the market are holiday properties or ‘second homes’. This new glut in the market could have a major impact on prices in places like Cornwall, where high proportions of the total number of properties are second homes.
But many commentators believe that the impact of the CGT rise on national property prices will be minimal. As the rise will not hit owner-occupiers hoping to sell their main residence, the effects will be largely limited to investment properties
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