Second home owners are not well served by capital gains tax legislation, says Michael Waterworth
For capital gains tax (CGT) purposes houses are just like any other asset with one important exemption—that the gain on disposal of a person’s principal private residence is not subject to CGT. This exemption applies to a dwelling-house— which might comprise more than one building— and a garden or grounds of up to half a hectare which is about one-and-a-quarter acres. Where the size and character of the house justify it, gardens or grounds in excess of that area may be exempted.