Give landlords more tax relief, RLA urges ChancellorMake Text Bigger
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.”
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