Call to help landlords revitalise sector
LANDLORD Assist, the nationwide tenant eviction and referencing firm, is calling for the Government to offer greater tax incentives to landlords to stimulate investment in private rented homes and help solve the current housing crisis.
Investors currently pay income tax on rental profits and capital gains tax on any profits made when the asset is sold.
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With landlords facing tax bills of up to 28 per cent of the value at the point of sale, many are reluctant to re-invest back in the market once they sell their properties.
But with landlords facing tax bills of up to 28 per cent of the value at the point of sale, many are reluctant to re-invest back in the market once they sell their properties. Subsequently, the rental sector is experiencing a shortage of new properties entering the market, despite demand for rented properties continuing to grow as people struggle to afford deposits required by lenders to purchase.
To help stimulate growth in the sector and improve the standard of accommodation Graham Kinnear, managing director at Landlord Assist says the Government needs to recognise the role played by landlords at present and provide financial and tax incentives to encourage them to reinvest their money in property.
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He says: "In some EU countires like Spain, residents can claim capital gains tax relief if they intend to invest the proceeds of the sale back into property or a percentage relief if only a portion or the property sale is reinvested.
"Allowing landlords in the UK to release capital with fewer capital gains tax liabilities would generate new properties and provide some much-needed stimulation to the housing market which would help to ease the housing crisis which currently exists in the private rented sector."
Kinnear adds: "The Government needs to look seriously at ways of incentivising investment into the rental sector to increase the number of properties available for rent. Buy-to-let investors are playing a pivotal role during tough economic times and we feel that landlords should be supported in expanding their portfolios.
"Not only do landlords provide vitally needed accommodation in the private rental sector but they also provide revenue by way of stamp duty, professional fees, letting agent fees and refurbishment expenditure."
Instead of encouraging further investment by landlords the Government has tried to take away the strain on the private rented sector by introducing a number of first time buyer initiatives but, Stephen Parry, commercial director at Landlord Assist says these have done little to improve the supply of accommodation.
He says: "On the whole landlords were overlooked in the Budget but we feel that there is real scope to help landlords which would help tenants and the wider UK economy.
"Breaks in capital gains tax would incentivise landlords to purchase more property and a stamp duty holiday for those buying to let would also be very well received."
Landlord Assist provide advice, information and services to landlords and letting agents throughout the UK and can be contacted on 08707 662288 or via their website www.landlordassist.co.uk
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