{"id":6095013,"date":"2023-02-13T08:50:29","date_gmt":"2023-02-13T08:50:29","guid":{"rendered":"https:\/\/www.buyassociationgroup.com\/en-us\/?p=6095013"},"modified":"2023-09-26T15:42:44","modified_gmt":"2023-09-26T15:42:44","slug":"tax-review-rented","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-us\/2023\/02\/13\/tax-review-rented\/","title":{"rendered":"Is a tax review needed to boost the UK private rented sector?"},"content":{"rendered":"

Various tax measures have been brought in by the government in recent years affecting buy-to-let landlords, and many in the industry believe an overhaul would benefit the sector – and its tenants.<\/strong><\/p>\n

The UK’s private rented sector is now worth an estimate \u00a31.5trn, according to the latest research from Sirius Property Finance<\/a>. Its total value has soared by 30% since 2019, off the back of the post-Covid ‘boom’<\/a> that the whole market experienced.<\/p>\n

It also reports that the overall size of the sector has grown by 2.4%, which is a huge positive for the industry and demonstrates that appetite is still high among many investors and landlords who continue to benefit from the resilience in the sector.<\/p>\n

However, tax changes that have been imposed in recent years have certainly had an effect on many in the industry, argues the National Residential Landlords Association<\/a> (NRLA).\u00a0With approximately 4.9 million renting households across the country, the NRLA\u00a0is urging the government to conduct a tax review to incentivise landlords to continue to provide much-needed housing for millions of people.<\/p>\n

What changes have affected landlords?<\/h4>\n

The NRLA has submitted a call to the Treasury, ahead of next month’s Budget, to carry out a full tax review looking at all of the recent changes that have affected the sector, and that have the potential to negatively impact the supply of homes to rent for tenants.<\/p>\n

The industry body’s research shows that aspects of the current tax system<\/a> have already begun to affect property investment<\/a>, with around 30% of respondents in its survey saying they plan to reduce the number of homes they rent out in 2023.<\/p>\n

Buy-to-let landlords and property investors are subject to a particular set of additional taxes, some of which have changed recently. The first consideration is stamp duty land tax<\/a> (SDLT), which all buyers must pay on purchase of a property, but investors are subject to an additional 3%.<\/p>\n

Thanks to Section 24 tax changes which are now fully in effect, those who rent out their properties can no longer deduct their finance costs – including mortgage interest payments – from their income tax bill. Instead, they can claim tax relief at the basic rate (20%), which has affected the bottom lines of higher earners.<\/p>\n

Capital gains tax<\/a> (CGT), which is payable on profits made on the sale of a property investment, has also changed recently, essentially lowering the tax-free allowance which could increase the bill.<\/p>\n

All of these measures, says the NRLA, were brought in to dampen appetite among buy-to-let landlords with the intention of opening up the property market for more buyers. However, as many argue, this has a hugely detrimental effect on the tenants who rely on the sector, and places pressure on the supply of homes available.<\/p>\n

Tax changes could reignite investment<\/h4>\n

According to Ben Beadle, chief executive of the NRLA, the current system is already having a “stark” impact on supply in the market.<\/p>\n

\u201cThe harsh truth is that the government\u2019s efforts to discourage investment in the sector are working,” he said. “But punitive taxation alongside record demand for rented housing is a disastrous combination that serves only to hurt renters.<\/p>\n

\u201cThe supply crisis we see is entirely government made and the policies of successive Chancellors have backfired spectacularly \u2013 it is time to change tack. The Treasury needs to undertake a comprehensive review of the taxation of the rental market.”<\/p>\n

He said that pro-growth measures would be the next step to help tenants to access homes, adding: \u201cWe encourage all of those with an interest in housing supply to contact their MP in support of our call, making use of the NRLA\u2019s toolkit to help.”<\/p><\/blockquote>\n

While there are also reports indicating that the buy-to-let sector<\/a> is seeing positive performance, with landlords reporting healthy yields particularly in some parts of the country, another look at the tax environment could provide a much-needed boost to the industry.<\/p>\n","protected":false},"excerpt":{"rendered":"

Various tax measures have been brought in by the government in recent years affecting buy-to-let landlords, and many in the industry believe an overhaul would benefit the sector – and its tenants. The UK’s private rented sector is now worth an estimate \u00a31.5trn, according to the latest research from Sirius Property Finance. Its total value… Read more »<\/a><\/p>\n","protected":false},"author":1069,"featured_media":17350,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[59,2,4],"tags":[15,191,207],"acf":[],"_links":{"self":[{"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/posts\/6095013"}],"collection":[{"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/users\/1069"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/comments?post=6095013"}],"version-history":[{"count":2,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/posts\/6095013\/revisions"}],"predecessor-version":[{"id":6095535,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/posts\/6095013\/revisions\/6095535"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/media\/17350"}],"wp:attachment":[{"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/media?parent=6095013"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/categories?post=6095013"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/tags?post=6095013"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}