A further sign that landlords are selling up comes from new HMRC figures that reveal an increase in Capital Gains Tax (CGT) revenues for the Government from the sale of residential properties.

During the 2022/23 tax year those selling residential properties with a CGT liability – which will be largely landlords selling rental properties – paid £1.9 billion to HMRC, a 7% increase on the previous year.

Some 149,000 tax payers created this tax take, 8,000 more than the year before. CGT is only paid on second homes and rental properties owned by individuals.

CGT has also risen in recent years for another reason. In recent years the Tories quietly cut the annual allowance above which CGT is liable from £12,300 in 22/23, then £6000 in 23/24 and now £3,000.

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CGT is payable on gains made from the sale of any asset including, as well as additional homes, any shares not in an Individual Savings Account or Personal Equity Plan and business assets and although property CGT revenue has increased for the Government, overall it has dropped by 15%.

Dawn Register (pictured), Head of Tax Dispute Resolution at accountancy firm BDO says: “While [these] figures show a decline in CGT in the 22/23 tax year, CGT liabilities rose for those selling second properties.  

“This could be a sign that landlords and holiday home owners are selling up off the back of earlier tax changes and the impact of fiscal drag.

“They also show that CGT tends to come from a small number of taxpayers, with less than one percent of those liable to CGT contributing over two fifths of CGT tax revenues.”

BDO says that Chancellor Rachel Reeve’s recent announcement that flagged up likely tax rises in her Autumn budget did not mention CGT, it is likely to be one area where additional taxes may be levied.