Some property tax questions have been around ever since capital gains tax and VAT were introduced.
Are there thresholds below which property tax does not apply? Can you include it in your asking price when making a sale? Should the buyer or the seller be aware of how much tax is being paid?
In the current market, though, there is a new issue – whether or not your property for sale is worth more or less than when you bought it.
Capital gains tax is, by definition, charged on any gains made on the value of a building between the times that it is bought and sold.
But in a turbulent market, some people are selling at a loss – so what does this mean for property tax?
Across both England and Wales, only London has seen house prices rise in the past year, by 1.4% – based on Land Registry figures for November 2011.
Everywhere else, prices are down. And that complicates property tax more than you might think.
For instance, you should not normally pay CGT on your own home. But if you would normally have to pay it, and you have made a loss this time around, you may be able to deduct that loss from any gains made – or, sometimes, from your income.
The rules in this area are complicated and very specific, so contact us with any property tax issues you might need clearing up.