If you’re selling a property that’s not your main home, you may have to pay Capital Gains Tax (CGT) on the sale. But did you know that getting a professional valuation could help to reduce your CGT bill, especially if you’ve owned the property for a long time?
What is Capital Gains Tax?
CGT is the tax payable when you sell and make a profit on a property that is not your main residence. Essentially, you pay tax based on the amount you’ve gained from the sale of the property, which means CGT is usually calculated based on how much you paid for the property and how much you sold it for.
Generally speaking, CGT applies to the following:
- Buy-to-let investment properties
- Business premises
- Land sales
- Holiday homes
- Properties purchased before April 1982
- The gift of a property
Why get an independent valuation for CGT?
You’ll need an independent property valuation to get an accurate assessment of the property’s value, so that CGT can be calculated correctly. Because the valuation is being relied upon for tax purposes, it must be carried out by a professional member of RICS, the Royal Institution of Chartered Surveyors, according to RICS Red Book standards. This professional valuation service ensures you get a fair valuation and don’t pay any more CGT than necessary.
The savings can be even more significant if you bought your property before April 1982. In these circumstances, known as ‘1982 valuations’, you can use the market value of the property in 1982 to calculate CGT, rather than the amount you paid for the property – which may have been a lot less than its 1982 market value.
But no matter how long you’ve owned the property, working with a professionally recognised valuer is the safest way to ensure your valuation is accurate, and that your best interests are taken into account.
Reducing your CGT liability
At Perry Hill Chartered Surveyors, our independent, RICS Registered Valuers provide valuations across London and Surrey, helping both residential and commercial clients get the best results with their CGT valuations.
We’ve found that 1982 valuations in particular have saved our clients a considerable amount of money on their CGT bill. Discover whether our expert property valuation services could help reduce your CGT liability, too.