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Taxation warning on principal private residences

Prime Purchase said that many of these people might not appreciate that their new home, if either rented or bought would become their "principal private residence" for tax purposes, even if they still owned their original home, three years after moving.

This would mean that people waiting for the market to pick up in a few years time may well have to pay Capital Gains Tax if they sell their original house after moving out and letting it.

Guy Meacock of Prime Purchase said: "If people recognise this threat and act logically, it may well be that we see some property coming back onto the market in order to avoid this tax charge in a year or two’s time.”

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