Scottish landlords support SNP's proposed changes to Finance Bill

The government’s proposed changes to mortgage interest relief, which will  see landlords taxed on their turnover rather than profit, has been slammed by the Scottish Association of Landlords (SAL) as an “attack” on decent landlords operating in the private rented sector (PRS).

From 2020, landlords will no longer be able to deduct the cost of their mortgage interest from their rental income when they calculate the tax due, but SAL fear that this could push many landlords into a higher income tax bracket despite their income not having increased.

“It is possible that the tax due in many cases could be higher than the landlord’s actual income, causing their businesses to go bankrupt, significantly reducing the number of homes available for rent and forcing an increase in rent levels,” said a SAL spokesperson. “This would disproportionately affect the supply of affordable housing in the private rented sector.”

The mortgage interest relief changes, which were debated at Westminster yesterday, could also lead to poorer maintenance of existing properties, according to (SAL), which is backing an SNP amendment to the Finance Bill.

An amendment submitted by the SNP shadow treasury team would require the UK government to review the impact of changes to mortgage interest relief on the availability of affordable housing.

“The changes to MIR are yet another attack on responsible landlords who provide essential housing across the UK,” said SAL chief executive John Blackwood. “The changes will mean landlords are taxed on their turnover, unlike every other business in the country which is taxed on profit. This will likely force a large number of landlords to sell, reducing much needed housing supply.

“The result will be increased costs for landlords and either a reduction in investment, an increase in rents or both. All of this at a time when governments in both London and Edinburgh acknowledge the vital role the private rented sector has in tackling the current housing crisis. We will work with our members to try and ensure vulnerable people do not suffer. Increased costs will inevitably impact most on those who cannot afford to see bills increase, potentially driving them in to the arms of rogue or criminal landlords who do not meet legal standards on safety or tenant security.”

He continued: “We welcome the amendment by Roger Mullin MP and urge the UK Government to accept it. Delaying the implementation of the MIR change until the study is complete will ensure that there is firm evidence available as to the likely impact it will have on the most vulnerable in our society.

“It is possible that the tax due in many cases could be higher than the landlord’s actual income, causing their businesses to go bankrupt, significantly reducing the number of homes available for rent and forcing an increase in rent levels,” said a SAL spokesperson. “This would disproportionately affect the supply of affordable housing in the private rented sector.”

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