Give landlords more tax relief, RLA urges Chancellor

Give landlords more tax relief, RLA urges Chancellor

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Give landlords more tax relief, RLA urges Chancellor

Chancellor George Osborne should give buy to let owners a new tax deal to stimulate more investment in private rented homes, claims a landlord lobby group.

The Residential Landlords Association (RLA) argues the current tax regime for buy to let is unfair and chokes investment if landlords want to grow the number of properties they let.

To make more letting properties available for renters, the RLA wants the Chancellor to change the tax rules for buy to let property owners in the Budget.

The RLA wants him to give landlords three new tax reliefs:

  • Capital gains tax roll-over when a rental property is sold to a first time buyer or reinvested in buying more rental property
  • Opening self-invested pension plans (SiPPS) to residential rental property with safeguards to avoid abuses
  • Giving landlords the chance to claim capital allowances for property improvements

A report by tax and property expert Professor Michael Ball, of Reading University, for the RLA last year, identified treating buy to let as an investment instead of a business costs landlords around £1,000 in tax, which is often passed on to tenants as higher rent.

The cost of granting landlords the reliefs would be offset by increased tax from larger buy to let businesses and investment in renovating properties when they change hands.

RLA Chairman Alan Ward said: “With rapidly increasing demand for rented accommodation and a supply shortage driving up rents, there is a real need for changes to the tax treatment of the sector to encourage it to invest. It is a nonsense that when landlords are running a business, that they should be hampered by a tax system that treats them as investors.

“Our proposals for change are cost neutral as they recognise the revenue that will flow from income to new and larger landlords and that every £1 invested in the sector provides a return to the economy of £3.50 through expenditure on building work and furniture.”



Comments

Doreen Marr

6 years ago

Buy to let is without question a business and hopefully an investment, it's the reason when we sold our manufacturing business that I entered this market....but I understand this is a risk we take, just as with any business.

But my observations are, there are so many imposed legislative demands on todays landlords I fail to understand why the government sets rules demanding that landlords do this that and the order and yet on the other hand they allow HMRC to treat landlords as if they where rogues! It is a degradation of good honest people.  Is this the 80/20 scenario, 20% of landlords may well be rogues but the rules laid down to capture these means the whole industry is being governed to accommodate these rogues.  It all seems a little one sided to me. 
Recently I experienced a near miss purchase of a property that was or is, it is still under discussion in the Hyndburn area, of  enforcing landlords to purchase a license to rent property in certain areas.  This, I understand, is being brought about because the local authority wish to enforce the landlords who buy these properties to bring the properties up to a certain standard and maintain and enforce good house keeping rules with their tenants, ie they are expecting the landlords to police their tenants and bring their tenants up to a certain standard.

Least we forget.....years ago, the council provided council homes for these tenants/people. In the mist of time people have forgotton this.  The council used to incurr heavy expenditure refurbishing properties which tenants left in appalling condition.  Is today any different.  Tenants like these will always be around.  The difference as I see it, and it is just my opinion, and I accept there will be other views.  The Council now wants landlords with properties in these poorer areas to obtain a license, ie buy the license, so that is another cost!  They want the landlords to refurbish these properties to a standard that they will specifiy. They want the landlord to police the tenants in that area!   Now where is the incentive?  There is none! The landlords who currently own property in these areas will, I believe, just do a special trading deal outside the exisitng rules.  As rental costs grow, these landlords will undercut the standard rents and there are always tenants that will be willing to accept these deals for poorer quality homes. The next thing that will happen is, as the Council enforce their rules, these landlords will stop buying in these areas and migrate elsewhere where they can do business unimpinged and without the necessity to purchase a license.  This leaves the area in a worse state than when they started out.
Why would you buy a license to rent only to find you then have to incurr substantial renovation costs to bring the property upto an acceptable standard when the cost of renovation could have been used to purchase another property.  Please do not tell me that the renovation will add increase the sales cost of the property......... I know this, but in an area that needs eveyone to adhere to the renovations, this may take sometime and the risk involved is expensive....Where is the incentive? 
Why does the government not understand this?  When are we as landlords, good landlords who take care of our tenants ever going to receive any recognition instead of being made to feel inferior because of the business area we chose to operate in.  HMRC we are constantly fed...... see landlords as on the fiddle... dishonest..... it's time we stood up for all the hard work we put into managing our properties and our tenants..... and it is hard work until you get good tenants, which I thank the lord I have and I count my blessings everyday.

There we go......... I have had my say......I'd like to hear from anyone else who also thinks this is one way traffic....... in favor of the government/council...... where are the incentives?  Show me one...... just one......?     

6 years ago

A would like to see a lower rate of tax for landlords that
rent out more energy efferent homes, maybe disregard the first £500 of
profit  for homes in class C and above. 

Some way that a person that rents out there former home and
is living in rental accommodation can offset some of the rent they are paying.  At present there is double taxation when a
person is forced to move for work, in that both their rental income and there
new landlord’s rental income is subject to tax.

SiPPS to
be able to invest in property that is then leased to a social landlord or
offered var “Rent To Buy”

Mark Alexander

6 years ago

If you run for Chancellor or fancy Grant Shapps job Ian you'll have my vote 😉

6 years ago

As a first time buyer I see landlords have generous tax advantages over us already.  What is needed is less tax relief not more to give all house buyers a fair playing field, after all landlords and first time buyers are competing for usually the same properties.

6 years ago

Please explain the tax advantages you think that landlords have.

6 years ago

I thought this maybe of interest to you all as to what is going on in the BTL market.
There is a new development almost on-top of Bishop's Stortford stn.
160 flats in all
40 have been purchased by Hackney Council to house their homeless!!
About 10 have ben purchased privately.
The rest have been purchased by investors.
The noise from the trains is horrendus but they have still all sold.
I bet the tenants and private purchasers don't realise that they will be living next to Hackney council homeless tenants.
You can bet the council paid considerably under market value using their effective free money, called council ta and cheap govt loans to house their homeless.
This will be happening to all nice development, they will be selling to councils and yet there is no way these deveopers will be advising the investor and private purchasers that they will have council tenants in the same block as them 


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