Budget 2010: Capital Gains Tax on second homes

The Chancellor of the Exchequer George Osborne has set out his Budget with a comprehensive five-year plan to rebuild the British economy.

With regard to residential property, owners of second homes may pay higher taxes, the Chancellor announced today.

Capital Gains Tax (CGT) will rise from 18% to 28% for those liable to income tax at the higher and additional rates. Basic rate taxpayers will continue to pay CGT at the current 18% rate.

The existing £10,100 threshold before there is any liability to pay CGT will remain in force and will be increased each year in line with inflation. This means you will not be liable to pay CGT on the first £10,100 rise in the value of your second home when you sell it.

There is no change to the CGT exemption on the sale of your sole or main residence.

Source: UK Property Shop