Changes to capital gains tax announced in the recent Autumn Budget will see the average landlord pay as much as £1,764 more if they decide to exit the buy-to-let sector once the reduced allowance comes into force in the 2023/24 tax year.

That’s the conclusion of analysis by London agency Benham and Reeves, which looked at the average capital gains on buy-to-let investments across each county of England over the last nine years – the average length of time a landlord owns their portfolio.

The study also took into account the current tax payable if landlords exit at both the basic and higher rate, as well as how this differs from what they will pay once changes to the capital gains tax allowance are applied.

The research found that with the average house price across England now at £314,278, the average landlord has seen capital gain to the tune of £130,000 over the last nine years based on the latest available house price data from the Land Registry.

With the current capital gains allowance of £12,300, this would mean £117,704 of this £130,000 increase in property value is currently liable for capital gains tax. As a result, the average landlord offloading their portfolio and paying the basic rate of tax would pay £21,187 in capital gains tax today, while this figure climbs to £32,957 for those paying the higher and additional rates of tax.

However, with the capital gains allowance changing to just £6,000 come the 2023/24 tax year, the average landlord looking to offload their portfolio would be facing a bill of £22,321 at the basic rate, and £34,721 at the higher and additional rates of tax.

This means that those on the basic rate of tax will see their potential capital gains tax bill climb by £1,134, while those paying the higher and additional rates of tax will see an increase of £1,764.

According to the research, Surrey will be the area hardest hit by the change. Landlords in the county looking to exit the market would be facing a capital gains tax bill of £38,167 at the basic rate and £59,371 at the higher and additional rates based on the capital appreciation of their investment over the last nine years.

London landlords will be liable for the second-highest rise, with those paying the basic rate facing a capital gains tax bill of £36,922 when exiting the buy-to-let sector after the changes, while those paying the higher and additional rates of tax will pay £57,435.

Marc von Grundherr, director of Benham and Reeves, described the planned reduction in the capital gains tax allowance as a “government attack on the nation’s landlords”.

He said: “Buy-to-let remains one of the safest investments you can make and the right investment is still incredibly profitable. So the latest hikes to capital gains tax are unlikely to deter both the institutional and amateur investor.

“However, it’s clear the government is intent on reducing this profitability and one must wonder just how many minor government cash grabs the nation’s landlords are willing to take, before they decide enough is enough and exit the sector.”