Changes to Capital Gains Tax (CGT) will benefit some, but not all those with second properties, according to Savills, who say those who have owned property and estates for many years are left potentially a great deal worse off should they sell.

Up until now, for long term purchases ? properties bought before April 1998 ? indexation provided a buffer in how much CGT was charged, and allowed for a doubling in value before the difference between purchase and sale price was calculated.

After April 1998 Taper Relief came into play, which provided a sliding scale of relief depending on the period of ownership and the use of the property. For those using property as a business, Business Asset Taper Relief effectively brought CGT down to 10% after 2 years, and non-business asset taper relief reduced it to 24% after 10 years.

Now with the flat rate of 18% charged on capital gains, both indexation and taper relief have been scrapped which means if you have a long-term asset you may well be worse off selling it next year than this, because the removal of the indexation buffer means that you will have to pay tax on the full increase in value.

The changes also mean that people who are buying houses for buy to let are going to be better off after April, as there is no incentive to hold onto property for a long time to bring down the CGT.

?Taking an example of a 500 acre in hand farm with buildings owned in 1982 and sold in 2008, a sale before 6th April 2008 would result in a tax change of just over £12,000 whilst a sale after this date will lead to a 1522% increase in tax payable to over £196,000,? warns Simon Dixon Smith of Savills.

?In terms of the market we might well see a flush of holiday homes or farmland onto the market, to take advantage of the Business Taper Relief, whereas there may not be much investment property for sale until after April next year, as people make the most of paying less with the flat rate coming into force,? continued Mr Dixon Smith.