RLA calls for lower landlord tax
by Daniel Jones
The government should do more to lower landlord tax
for buy-to-let property investors, a landlord organisation has said. Chancellor George Osborne was called on by the Residential Landlords Association (RLA) to free up the current tax system to encourage investment in the sector.
RLA chairman Alan Ward said there is a "real need" to reform the tax system as increasing demand drives up rents. "It is a nonsense that when landlords are running a business, that they should be hampered by a tax system that treats them as investors," he adds.
The RLA is calling for roll–over relief for capital gains when a rental property is sold to a first-time buyer or reinvested in rental property. The organisation says this would help first time buyers to get a foot hold on the housing ladder while freeing up rental accommodation.
In addition, the RLA wants the chancellor to introduce some form of capital allowance to let landlords reinvest in properties. It notes that properties lose value as they are lived in and require periodic refurbishment. Currently, however, there is no relief for reinvestment and improvement until a sale is eventually made.
The RLA also called for Entrepreneur Relief on Capital Gains Tax to bring the sector in line with other businesses and encourage a "churn" of properties with more being refurbished.
"Our proposals for change are cost neutral as they recognise the revenue that will flow from income to new and larger landlords and that every £1 invested in the sector provides a return to the economy of £3.50 through expenditure on building work and furniture," argues Mr Ward.
Landlords looking to avoid tax
have many options open to them, but a recent crackdown on tax evasion in Scotland shows that the issues need to be tackled carefully. HM Revenue and Customs is launching a new taskforce to recoup more in landlord tax north of the border, part of a wider plan to raise tax revenues by £7 billion a year by 2014/15.
Published on: February 29, 2012
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