Chancellor urged to boost tax relief for landlordsMake Text Bigger
Chancellor George Osborne is coming under more pressure from landlord and letting agent lobbies to ease buy to let tax in the forthcoming Budget.
The Association of Residential Letting Agents (ARLA) is urging the chancellor to scrap capital gains tax on investment properties and ripping up stamp duty rules to make the tax fairer for all.
The call from ARLA follows a similar recent clarion cry from the Residential Landlords Association (RLA) to Osborne.
Both groups want the government to change the tax status of buy to let away from investment to business.
Investors pay income tax on rental profits and capital gains tax on property disposal gains, while businesses pay income tax on profits and have a raft of capital gains tax reliefs to encourage reinvestment.
Ian Potter, operations manager at ARLA, said: “Landlords must be treated as the entrepreneurial businesses they have now become. Supporting growth and encouraging greater investment into the private rented sector will help boost our economy and is an open goal for the chancellor.
“Demand for private rented housing continues to grow, with 3.4 million tenants living in the private rented sector – an increase of over a million tenants since 2005.
“The tax system can be used by the government to incentivise investment in private rental housing stock, and to improve the conditions in which tenants live.”
ARLA wants the government to encourage investment in the private rented sector by:
- Treating rented property as al business activity for capital gains tax
- Reintroducing roll-over relief for landlords reinvesting in rental property
- Reassessing stamp duty to create a fairer system
“Landlords play an important role in providing housing, but they are not treated as businesses. Some landlords face tax bills of up to 28% when selling a property, preventing them from reinvesting in the market,” said Potter.
Potter also wants the government to create a fairer stamp duty tax that does not penalise homebuyers and investors.
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