The independent Institute for Fiscal Studies has today warned that the Treasury’s budget analysis on the rental market is “plain wrong”.
Speaking about the Chancellor’s decision to restrict mortgage interest relief to the basic rate for landlords, IFS Director, Paul Johnson has this afternoon said:
“At present if you own a property which you let out to tenants you can set any mortgage interest costs against tax due on rent received.
“The Budget red book states that this means that “the current tax system supports landlords over and above ordinary homeowners” and that it “puts investing in a rental property at an advantage.
“This line of argument is plain wrong.
“Rental property is taxed more heavily than owner occupied property. There is a big problem in the property market making it difficult for young people to buy, and pushing up rents. The problem is a lack of supply. This change will not solve that problem.”
- The remarks, made by Paul Johnson were delivered at the Institute for Fiscal Studies’ post-budget briefing. His speech in full is available at http://www.ifs.org.uk/uploads/publications/budgets/Budgets%202015/Summer/opening_remarks.pdf .