The new Housing Minister Gavin Barwell claims that the tax changes coming into effect in April will affect just 20% of all UK private residential landlords.
The changes to buy to let taxation include the landlord’s ability to claim mortgage interest tax relief, a stamp duty surcharge on second homes which includes all rental properties, and a differential rate of capital gains tax which penalises landlords.
This claim comes to light as a result of a recent Association of Residential Letting Agent’s (ARLA) report on a January meeting of the All Party Parliamentary Group for the Private Rented Sector (PRS) attended by Mr Barwell. Quoting HMRC figures, Mr Barwell claimed that the chages affect only a minority of Buy to Let landlords at around 20%.
At the meeting James Gray, MP for North Wiltshire, voiced his concerns that the tax changes. He thought the new system would mean that many landlords will no longer be making money and would be forced to sell-up, reducing the supply of an already undersupplied market for rental properties.
The Minister agreed with him that the implications of the new system need to be considered, before quoting the HMRC figures.
Commenting on the situation with the proposed ban on letting agent fees charged to tenants, Helen Hayes, MP for Dulwich and West Norwood, said she welcomed a ban. She said that the cost of letting fees for tenants was a key issue facing tenants in her constituency.
Acknowledging the lack of supply of homes to rent, and rents going up by more than wages, the Minister noted a main reason was costs going up, and confirmed the consultation into the fee ban would take place in March to “inform the detail of the policy and how it would work”.
Just 20% of landlords affected by tax changes… https://t.co/bx2HPF4On1
— LandlordZONE (@LandlordZONE) February 6, 2017