The government is being urged to scrap stamp duty for buy-to-let landlords who want to add to their property portfolio and reconsider cutting mortgage interest tax relief to help prevent rents from spiralling out of control.
The TaxPayers' Alliance, a British pressure group and think tank, fears that tenants will end up bearing the cost of the latest tax rises for landlords as they will result in a reduction of homes on the rental market that in turn will push prices higher.
The volume of landlords acquiring property has fallen sharply since the 3% stamp duty surcharge was introduced at the start of April and there is widespread concern that the clampdown on mortgage interest relief from April 2017 will deter more people from investing in the buy-to-let sector, which will drive up rents as there will be a lower number of properties available to let on the market.
Many landlords will soon be left with no alternative but to pass extra costs onto landlords as they will lose the ability to offset all their mortgage interest against tax on rental income, but the TaxPayers’ Alliance believes that the government still has an opportunity to undertake ‘real reform’ to tackle the housing shortage in the UK and stop rents from increasing, by modifying or abolishing stamp duty and mortgage interest tax relief changes.
“For decades politicians have failed to tackle the root causes of the housing crisis: a chronic lack of supply,” said Jonathan Isaby, chief executive of the TaxPayers' Alliance.
“Stamp duty is still punitively high and gimmicky tweaks to the tax system will ultimately end up penalising tenants and increasing rents,” he added. “The new Chancellor should now seize the opportunity to drastically simplify and reduce property taxes, while removing planning restrictions which prevent huge swathes of land from being built on for no good reason at all.”
The Residential Landlords Association (RLA) has welcomed the new report by the Taxpayers Alliance published today, which it views as another ‘damning indictment of the government’s tax grab on landlords’.
“Recent tax changes will see many landlords increase rents,” said Alan Ward, chairman of the RLA. “This will make it harder for tenants to save for a deposit for a home of their own. It will go against everything the government claims it wants.”
Ward believes that a tax system that ‘encourages’ rather than ‘damages’ housing supply would boost revenue for the Treasury and cut costs for tenants.
“Ahead of the Autumn Statement there is now an opportunity for the new government to think again about its tax on new housing,” he added.
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Yawn, it's the same "news" again.
If a landlord puts up rent to offset the reduction in interest tax relief..... The landlord will make more profit and thus pay more income tax. Not sure why the government would be worried about this aspect?
A sensible, thought out approach from the TaxPayers' Alliance. Hopefully, the new Chancellor will see the sense of their research and take action on the ill-conceived and politically-motivated attack on private landlords instigated by the previous, unlamented Chancellor
Not sure where the "sensible" part was.
Tax paid = services (like fire service)
Should a person owning more than one house pay more tax than a person who owns no house?
Just extracted this from an article on buy to let arrears in these columns. "we have seen no let-up in demand for buy to let mortgages". I think someone should take a look at the reports that appear here as they seem to be in conflict!
Rather than displaying balanced news, this site seems to be a lobbying portal creating panic for landlords.
It needs a strong editorial team to balance out any report
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