Some policies towards landlords show how the government has lost its conservative ethos of supporting businesses and being the party of low taxes.
Rosalind Beck - a campaigning landlord, Conservative member, and long-time critic of government changes to landlords’ taxes - has written in The Article that recent proposals regarding possible tax changes affecting the private rental sector owe more to a populist agenda than to traditional Tory philosophy.
Beck argues against recent proposals - said to have the ear of Chancellor Rishi Sunak - to make the Capital Gains Tax on additional homes higher than before. There is speculation this will be one of a number of proposals at next month’s Budget.
She writes: “It is … not clear whether they have any handle at all on the taxes private landlords already pay. I can help put them in the picture by outlining some of the property taxes landlords already face, even before proposed Budget hikes, using the following example of someone with one rental property. Remember, the majority of landlords are in this category.”
She then gives a detailed account of her own buy to let purchase, 20 years ago, and how taxes have eroded the profitability of the exercise - including, possibly, how future increases in CGT may diminish profits further.
“The amount of CGT demanded by the state also takes no account of inflation” she says, stating that between 2001 and 2021 annual inflation of 2.73 per cent would produce a cumulative price increase of 71 per cent - thus making CGT on capital appreciation particularly unfair as it does not take into account inflation.
Beck continues to make a strident case for reforming taxes for the private rental sector, and backing off on regulatory changes - including recent eviction bans and the threat of £30,000 fines for contraventions of local licensing.
She concludes her article by saying: “The Conservatives would do well to realise that if they go ahead with this, landlords will take whatever evasive action they can. Many will batten down the hatches and not sell up for years — in which case the government will receive only a fraction of the tax predicted.”
And she makes a radical suggestion: “Why not do the opposite instead and treat landlords fairly? Why not bring back taper relief, exempt inflationary gains and 'simplify' tax by getting rid of the eight per cent CGT levy introduced by the vindictive George Osborne? Such a positive approach to taxing landlords would be likely to increase sales and probably bring in far more revenue than a huge tax hike ever would.”
You can read the full piece here.
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