Lord Flight Disagrees With Landlord Tax Grab

by Mark Alexander

15:16 PM, 18th December 2015
About 5 years ago

Lord Flight Disagrees With Landlord Tax Grab

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Lord Flight Disagrees With Landlord Tax Grab

Lord Flight cc’d the Property118 Campaign Committee into an email to George Osbourne commenting on the restriction of Finance Cost Relief for Individual Landlords.Lord Flight Disagrees With Landlord Tax Grab

In his email to the Chancellor Lord Flight said …

“A lot of Buy to Let investment has been an alternative to saving for old age via pension schemes.  Up until World War II investing in rented property was the main method of providing for an income in old age.  Given the poor performance of the Stock Market over the last 20 years, it is hardly surprising that many people have opted for Buy to Let investment as an alternative source of retirement provisioning.  But Buy to Let does not enjoy any of the major tax advantages of pension saving, i.e. tax credit on the amount invested and accumulation of income and capital gains tax free within the pension scheme.  The only Buy to Let “tax advantage” has been the ability of the interest cost to be offset against an individual’s income to determine their tax rates/bill – the very thing which you have attacked.

The combined new 20% limit and additional 3% Stamp Duty on new Buy to Let investments may cause the very crisis in the Buy to Let market of which the Governor of the Bank of England has just warned.  Many Buy to Let investors may seek to sell their properties where buyers will be few, given the new, additional 3% Stamp Duty.  I attach a relevant article in the Telegraph last week warning that sales could put thousands of tenants’ security at risk.

I suggest the Government’s thinking that Buy to Let investment has “squeezed young buyers out of the market” is misconceived.  Rather, it has served to provide substantial additional accommodation for young people, not yet able to afford to buy a property.  The real problem here has been our nightmare planning arrangements, the new high rates of Stamp Duty applying to properties, in the Greater London area, and the hoarding of land with planning permission by developers.”

On a different, but related front, I also suggest the risks of a major crash in house prices in London and the South East has risen considerably, partly as a result of the penal rates of Stamp Duty applying to London properties.  The recent announcements by the banks indicate that some 100,000 middle to senior ranking staff are likely to be made redundant over the next year or so.  Many will be looking to sell their London properties and move to a cheaper part of the country.  Younger buyers cannot afford to buy, particularly given the Stamp Duty costs for which they cannot borrow.  Foreign purchases are declining as a result of the major increases in their taxation.  If there is a crash in Greater London property prices, this will have a major impact on the banks and on the economy as a whole, for which the Government will be blamed.  In short, the new penal rates of Stamp Duty, together with the aggressive fiscal attack on the Buy to Let market are “playing with fire” when other factors are changing the balance of supply and demand for properties. 

I, therefore, urge you to think again about both Stamp Duty rates and the fiscal attack on Buy to Let.”

About Lord Flight

The Lord Flight was born Howard Emerson Flight on 16 June 1948 , and is a Conservative Life peer sitting in the House of Lords since 13 January 2011. He previously sat in the House Of Commons as MP for Arundel & South Downs.

He was Shadow Chief Secretary to the Treasury (2002 to 2004) in opposition.

He was Deputy Chair, Conservative Party.

Lord Flight has the following focus areas :

Policy Interests – Business, industry and consumers; Economy and finance; Education; Employment and training; European Union; Social Security and pensions
UK Areas – East Anglia; Greater London; West Midlands


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Comments

Appalled Landlord

11:47 AM, 23rd December 2015
About 5 years ago

Reply to the comment left by "Chris Walters" at "21/12/2015 - 13:43":

Hi Chris

The Treasury officials must have been working under duress. It would appear that the Intergenerational Foundation gave the instructions to Osborne, using a very dodgy dossier: http://www.property118.com/landlord-tax-grab-source-document-exposed/83110/comment-page-6/#comments

IF certainly took the credit for Clause 24: IF’s Summer Budget Triple Win!
http://createsend.com/t/r-1B26E1A1CD7B33382540EF23F30FEDED

You will see that IF also wants bedroom-blockers to leave their homes. It wants ”taxation reform in order to discourage older generations from continuing to use housing as an investment vehicle during an affordability crisis.”

Bill

2:29 AM, 26th December 2015
About 5 years ago

I f you move to your beach first and become non resident in UK before you sell up, you are no longer liable for CTG, providing you stay overseas for 5 years.

Appalled Landlord

12:01 PM, 26th December 2015
About 5 years ago

Reply to the comment left by "Bill Williams" at "26/12/2015 - 02:29":

Hi Bill

That anomaly ended on 5 April this year.

Bill

12:14 PM, 26th December 2015
About 5 years ago

Only for capital gains made after April this year. Property values at April 2015 need to be established. So only gains on any increase in value after this date will be taxable. Previous gains would be exempt.

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