The Residential Landlords Association (RLA) said that the tax, which currently stands at 18 per cent, would be “devastating” to landlords if it is brought in line with earnings.

Landlords in the buy-to-let sector will be badly affected by any increase in capital gains tax, it has been claimed.

The Residential Landlords Association (RLA) said that the tax, which currently stands at 18 per cent, would be “devastating” to landlords if it is brought in line with earnings.

Alan Ward, chairman of the organisation, explained that if the tax comes into effect, the market will suffer as landlords and investors will stop selling property.

He added: “Equally, it will have a detrimental effect on the improvement of properties. Landlords generally spend on a property when they first buy it, to improve it, to alter it, to bring it to their standards, and the major work is done at that time.

“So if landlords arent buying property, then the general standards of property will deteriorate.”

The coalition government is expected to outline its plans for capital gains tax in its emergency Budget, which is to be unveiled next week.

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Posted by Royston Hunter