Philip Hammond will announce his budget tomorrow. And while there is no suggestion of any explosive news for landlords, what previous budgets have taught us is to expect the unexpected.
Rumours circulate that stamp duty could be axed for first time buyers – as research from RLA PEARL today reveals that the stamp duty levy on landlords is stifling investment.
It would appear the chancellor may had taken heed of the RLA’s proposal to redevelop small plots of public sector land for redevelopment – albeit for homes for sale rather than to rent.
The chancellor may also take the opportunity to act on the widespread concern over the roll out of Universal Credit – with the RLA giving evidence to the work and pensions committee on the issue.
Last month the association outlined a series of key asks of the government in its submission ahead of the budget and it is understood that its call for tax incentives for landlords offering longer tenancies could be successful – with a budget announcement promised by communities secretary Sajid Javid in a speech at the Conservative Party Conference.
Calls to axe the changes to mortgage interest relief have been central to the RLA’s campaigning since they were announced by George Osbourne – and the submission echoed calls to the government to follow the lead of Ireland and scrap the changes, which see landlords taxed on turnover rather than profit.
The submission says that, at the very least, the changes should apply only to new borrowing for new purchases in the rented sector, so that anyone wanting to invest in new property would be clear about the tax liabilities they will face from the outset.
It also calls for the government to:
- Waive the three percentage point stamp duty levy on properties that add to the overall net supply of housing
- Apply the 20% rate of capital gains tax when a landlord is prepared to sell a property to a sitting tenant
- Encourage the redevelopment of unused plots of land for rental homes
- Allow VAT to be re-claimable on any building work creating a new home irrespective of the tenure
- Establish the framework within which energy improvements to PRS homes can be funded
- Ensure any work that a landlord carries out to their properties as one of the recommendations on an Energy Performance Certificate, should be tax deductible
- Follow the recommendations made by Crisis to provide £23.6 million to fund a Help to Rent service in every English local authority area and establish a national rent deposit guarantee scheme to support homeless people to rent in the private sector
To read the submission in full click here.