NLA wants Budget to tackle landlord taxes

22 March 2010 | By Natalie Thomas

The landlord trade body says the government needs to acknowledge the extent that the number of renters has grown over recent years.

Figures published by the Department for Communities and Local Government in February show that between 2001 and 2008 the number of tenants has increased by one million to 3.1m.

But the NLA says that the current tax system discourages landlord investment.

David Salusbury, chairman of the NLA, says: “Given the current housing shortage the chancellor should use the upcoming budget to make investment in property easier and the management of a residential portfolio more cost-effective.”

It has recommended five areas where the tax system could be changed to actively encourage rental investment and benefit landlords.

Proposals include reducing the VAT rate for renovations and home improvements to 5%, and consistency from local authorities when it comes to charging council tax for multi-occupancy dwellings.

Another idea is the use of ’roll-over’ relief on Capital Gains Tax, so that released capital gains can be reinvested.

The trade body would also like to see the current ’slab’ system of Stamp Duty to move away from ’arbitrary’ price bands.

In cases where landlords make multiple transactions, the NLA recommends that each property should be taxed individually rather than as a bulk transaction as is the case currently.

Lastly, the NLA has proposed that the tax-free threshold for home owners taking in lodgers should be extended from £4,250 to £9,000 per year to keep up with current rental prices.

Salusbury adds: “None of the changes for which we are calling would put significant pressure on public funds or reduce tax income to any great degree; in fact most should encourage increased economic activity.”

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