Autumn Statement 2013 – PPR Changes to Watch Out For
Kind of came out of nowhere this, but it could have an impact on any capital gains on second property disposals from April 2014.
This only applies when you have lived in the property at some point.
Current rules, infamously exploited by MPs, allow for principal private residence relief (PPR) on the last 3 years of ownership, irrespective of whether you lived in the property at the end or not. The principle behind this rule is/was that you are/were given time to sell your main home whilst being allowed to move out and live elsewhere, waiting for the sale to go through.
If 3 years was about right/generous, the new maximum 18 months is a bit on the tight side.
The new rules do not come in until the 6th April 2014. So if you are sat on a house that you can claim some PPR on, you will need to do some calculations to see if the 3 years’ rule will make a difference to you when it becomes the 18 months’ rule. If it does, then you may want to bring forward any pending sale to take advantage of the more generous rule that expires on the 5th April 2014.