CGT rise 'could be good for first-time buyers'

An increase in capital gains tax (CGT) could be a good thing for first-time buyers, it has been suggested.

On Tuesday (June 22nd), the government announced that CGT was going to increase from 18 per cent to 28 per cent when it released details of the emergency Budget.

Managing director of first-time buyer consultancy FirstRungNow.com Helen Adams suggested that while this will have an impact on landlords who will be hit by the higher tax rate, it could help encourage more people to get on the property ladder.

She said: "Landlords may sell their properties, which may even serve to bring down prices a bit. Maybe it might make more properties available for a first-time buyer."

The government claimed the rise in CGT was intended to help create a fairer tax system.

Research from Moneyfacts.co.uk indicated that now is a good time for first-time buyers to get on the property ladder as mortgage rates have dropped to a seven-year low, with an average rate on a two-year fixed-rate mortgage being 4.52 per cent.