The National Landlords Association is urging the government to review taxation in the private rented sector following reports that Revenue & Customs is targeting 80,000 buy-to-let landlords who may have claimed too much tax relief. The NLA says that because the government department al-ready has the rental sector in its sights and given its importance tothe economy and the mobility of labour, this would be a good time to review tax laws and the tax relief on offer.
David Salusbury, chairman of the NLA, says: “While it is right for Revenue & Customs to look at whether landlords are paying the correct levels of tax, we are encouraging it to take a light touch. We also believe the time is right for a proper economic assessment of taxation in the rental sector, as there are one or two anomalies that should be looked at.”
He warns that the absence of roll-over relief from Capital Gains Tax may be acting as a disincentive to buy-to-let investors.
This means that if a landlord buys a property in an area of low tenant de-mand and has difficulty in renting their property, there is no relief from Capital Gains Tax should they decide to sell it and buy another in an area of higher demand.
He adds that there is also no tax relief for landlords who opt to manage properties themselves, whereas those who use letting agents can offset these fees against tax.