By Lorna Bourke

LONDON (Citywire) - In the face of falling house prices, some may decide to sell now before prices fall any further, particularly those with just their main residence and a holiday home to which they intend to retire.

Many babyboomers - those born just after the war - are now coming up to retirement and for a large number of these investors property, in the form of their homes, second homes, or buy-to-let investments is going to provide a significant part of their incomes when they stop working.

The reduction in capital gains tax to a flat 18 percent for all properties and other assets sold since 6 April 2008 has come just in time for these investors.

Many will simply sell their principal private residence in London or other urban centres where they have been working and retire to their country holiday home when they give up work. This will incur no CGT liability.

But for younger people not yet at retirement age who are finding the maintenance of two homes a strain, they may decide to sell the second home to release cash. However, it would be a mistake to make a hasty decision.

If the expense of running the holiday home and paying the mortgage is the problem - rather than the need for a cash lump sum - then it is worth considering a long let before making the decision to sell.

This might not work, however, as there is often a glut of properties to let in country areas, particularly seaside resorts in the West Country. Owners tend to let on short lets during the summer because it is more profitable. During the winter you can pick up a rental property for a song.

Some second home owners may be forced to sell and even those retiring might find a complete move to the country is not what they had in mind. Some will continue to work part time, in which case selling the country home might be the answer. And although paying 18 percent CGT is a big improvement on paying up to 40 percent CGT, there are ways of legitimately reducing this tax if you decide to sell the second home.