Chancellor urged to ditch stamp duty levy for landlords developing homes – RLA
Tax policies should support the development of new properties for tenants, according to the Residential Landlords Association (RLA) and the National Landlords Association (NLA).
The trade bodies are calling for the new chancellor Rishi Sunak to scrap the additional three per cent stamp duty levy if investors are developing new properties or converting large properties into smaller units.
There should also be a Capital Gains Tax exemption where landlords sell a property to a sitting tenant, the groups said.
And there should be tax relief for landlords to invest in measures to improve the energy efficiency of a rented property or let adapted properties long-term to tenants with accessibility needs.
It comes after a recent study showed the number of landlords has fallen to a seven-year low.
Separate research has showed investors are opting for holiday lets over long-term rentals.
David Smith, policy director for the RLA, said: “The tax system for rented housing is failing.
“It encourages the provision of holiday homes over long-term properties to rent, it deters investment in new housing and provides no support to those wanting to make energy efficiency improvements.
“For the sake of those living in rented housing or who are looking for accommodation, ministers need to use the Budget to urgently change course to ensure that their tax policies are positively aligned with their wider housing objectives to encourage good landlords to provide long-term affordable housing.”
Chris Norris, director of policy and practice at the NLA, added: “The tax system with which landlords must contend is no-longer fit for purpose.
“HM Treasury has constructed a series of barriers to investment, which make running an efficient and successful lettings business borderline impossible.
“As he prepares his first Budget, we hope that the Chancellor will take the opportunity to use taxation to encourage investment in new and existing homes alike. Mr Sunak must recognise that housing costs can only be reduced by making it easier, not harder, to provide good quality rented homes.”
“The emphasis must be on finding solutions and encouraging investment across tenures amongst a diverse range of providers.”
Budget 2020 confirmed for March 11
New chancellor Rishi Sunak will lay out his spending and tax plans for the country just a month into the job.
There were doubts whether the Budget would ahead in March after Sajid Javid’s shock departure as chancellor in Boris Johnson’s cabinet reshuffle last week.
However, Sunak today dismissed speculation the event would be moved.
The MP for Richmond in Yorkshire wrote on twitter: “Cracking on with preparations for my first Budget on March 11. It will deliver on the promises we made to the British people – levelling up and unleashing the country’s potential.”
Some experts have said the change of chancellor could mean a big spending boost for the country.
A number of industry figures and campaign groups have called for a change to stamp duty structure to help boost activity in the housing market.
Sajid Javid quits as chancellor four weeks before Budget
The MP for Bromsgrove (pictured) resigned in the latest twist of prime minister Boris Johnson’s post-Brexit cabinet reshuffle.
Rishi Sunak, former chief secretary to the Treasury, has been appointed as the new chancellor.
He had been in the role as secretary since July 2019, after previously serving as the minister for local government since January 2018.
Javid was set to lay out his plan for the economy and the country’s finances in the Budget scheduled for March 11.
But in a day of high drama for Number 10, the MP reportedly quit over the prime minister’s insistence he fire his team of advisers to stay in the role.
He had been chancellor for less than a year, taking up the post in July 2019.
It comes after housing minister Esther McVey was also sacked, as part of changes to Johnson’s senior team.
Budget could be spending bonanza
Paul Dales, chief UK economist at Capital Economics, said Javid’s exit could mean government purse strings are loosened more than previously expected in next month’s Budget.
The former chancellor was apparently reluctant to significantly increase public borrowing by cutting taxes or increasing spending and investment.
Dales added: “The move seems designed to allow the government to push through even bigger increases in public investment and perhaps resuscitate tax cuts that previously looked dead in the water.
“Indeed, Sunak’s previous votes in Parliament suggest his views are perhaps more aligned with those of the prime minister and his chief special adviser Dominic Cummings than Javid’s.
“His voting history shows he’s an ardent Brexiteer, supports reductions in corporation tax, cuts to capital gains tax and he’s gone on the record as favouring infrastructure investment. So this is either going to be a meeting of minds or Sunak will be the prime minister’s yes man living in Number 11.”