ARLA (Propertymark) A Force for ChangeSeptember 29, 2017 2:43 pm
ARLA Propertymark is calling on the Government to reverse the recent 3% Stamp Duty surcharge for buy-to-let properties, and revoke the Mortgage Interest Relief changes that has resulted in the costs of running a landlord business sky-rocketing. This will only get worse in the run up to when the tax relief level reaches its minimum in 2021.
We argue that the increased costs associated with letting properties out, will harm tenants in the end, with costs being passed onto tenants, which will also have the knock-on effect that they will find it even more difficult to put away their cash in order to save for a deposit to buy their first home. This goes against Government promises to help people buy their first home.
Landlords should be treated like any other business. The vast majority provide a valuable and professional service, so they should be subject to the same tax laws as any other business that provides a service. The days of money made from letting out properties being classed as ‘unearned income’ should be numbered.
Businesses in other industries benefit from roll-over tax relief and we think this should also be available to landlords who reinvest in the private rented sector, and that Capital Gains Tax should only be charged on profits that aren’t reinvested. Introducing such changes could also benefit tax revenue for the Chancellor and increase the fluidity of the property market bringing more choice for others across the property market demographic.
We would also like to see the Chancellor cut VAT on materials and labour costs to encourage investors to take on older properties that may be derelict, which would in turn go some way to help the empty home crisis.
Commenting, David Cox Chief Executive of ARLA Propertymark, said:
“As the private rented sector is left to house the nation the Chancellor must look at whether current policies are helping or hurting. We know that the proportion of letting agents seeing landlords raising their rents has reached a two-year high. Unless the Chancellor changes course landlords are likely to continue to shift the burden of recent tax and regulation changes on to their tenants.”