Tax breaks for people who own more than one property will be scaled back from the 6th April 2014. Later this year, the Government will reduce the amount of capital gains tax (CGT) relief available on sales of second homes from three years to 18 months.
Capital Gains Tax is a tax on the gain or profit you make when you sell a property. If you own more than one property, the second will be liable for tax when it is sold. Owners can elect which property is treated as their main residence, as long this is done within two years of buying a second property.
Currently, if at any point that property has been the only or main residence, the last 3 years of ownerships do not incur CGT; however, in April this will reduce to just 18 months. The planned changes by the Government will hit families who rent out their second home after moving, landlords and those with holiday homes across the UK.