SAL urge action against tax changes

by Property 118

9:25 AM, 16th August 2016
About 2 years ago

SAL urge action against tax changes

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SAL urge action against tax changes

The Scottish Association of Landlords (SAL) are urging action against Clause 24 tax changes to be taken by landlords in their latest policy press release below:Scottish Association of Landlords

Over the past year landlords across Scotland have faced significant changes to the way they are taxed.

The former Chancellor argued that landlords are buying properties that could go to first time buyers, despite evidence from organisations such as the London School of Economics showing that this is not the case.

Concluding that landlords enjoyed more favourable treatment within the tax system (an assertion rejected by the independent Institute for Fiscal Studies) George Osborne sought to “level the playing field” between home owners and landlords. This includes:

•    Between 2017 and 2020 the Government will phase in only providing mortgage interest relief at the basic rate of income tax;

•    Unlike with any other business, income tax for some landlords will then be calculated on the landlord’s income, and not their profit;

•    The 28% rate of Capital Gains Tax will be cut to 20%, but this will exclude residential property, including homes to rent;

•    Removal of the ‘wear and tear’ allowance. This has been replaced with only off-setting actual costs incurred on replacing furnishings, appliances and kitchenware in a rented property.

Alongside these, the Scottish Government has introduced a 3% levy on the Land and Buildings Transaction Tax (LBTT) for those buying additional properties, including ones to rent.

With a new Chancellor due to deliver his Autumn Statement later in the year there is an opportunity to appeal to him to reverse or amend the more difficult parts of these changes.

Lobbying by SAL members will be crucial. It will be supported by lobbying by the Residential Landlords Association (RLA) south of the border.

Firstly, we need evidence. Please complete our short survey to help us to understand what impact the measures are likely to have. For example, faced with such tax rises are you likely to consider increasing rents? The survey can be accessed via this link.

If you are unsure of the effect the changes will have on your finances, you can use this spreadsheet (kindly provided by the Property118 online forum) to calculate this. Remember to consider the potential effect of future changes in interest rate too.

Secondly, please meet your local MP(s). It is the UK parliament (Westminster) MPs that we need you to contact with this action. Contact the MP where you live as well as those wherever you rent out properties.

Tell them how the changes are likely to affect tenants. i.e. how it will affect the supply of affordable homes making it more difficult for tenants to find a home, and/or how it will lead to higher rents. Urge them to write to the UK Chancellor and the Finance Minister in the Scottish Government in support of a rethink.

SAL has produced a guide for members to help and encourage you. Download that here. The document includes details of how to go about meeting your MP(s), key points to discuss and what you could ask your MP to do.

You can also use information in our Tax Briefing document.

Remember to let us know that you are taking action and let us know how you get on. You can contact SAL by email via info@scottishlandlords.com. Please also contact us if you would like any further information or support to take part in this action.

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