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Figures debunk myth that buy to let investors are wealthy
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Original Source: Letting Agent Today.
Original Author: Graham Norwood.
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Far from being wealthy property investors, two thirds of individual landlords pay merely the basic rate of income tax according to data released by the government.
The Residential Landlords Association says this challenges the myth that landlords have large incomes and so can cope with tax rises.
According to the figures obtained in response to parliamentary questions from DUP MP Jim Shannon, of the just over 1.9m unincorporated individual landlords returning a self-assessment tax return, two thirds were in the basic rate bracket.
Some 30 per cent were in the higher rate band and four per cent paid the additional rate.
Treasury minister Mel Stride also confirmed that landlords are taxed more than homeowners noting that they pay tax on their rental income, extra stamp duty and capital gains tax unlike home owners.
The RLA claims this effectively kills off assertions made by the former Chancellor, George Osborne, that tax rises on private landlords were about levelling the playing field with home owners.
Although in another answer the Treasury re-asserts that it estimates only one in five landlords will be affected by the reduction in mortgage interest relief, it confirms that it has no idea how many properties, and therefore tenants, will be affected by this additional cost pressure.
“[George Osborne] increased taxes on the private rented sector based on what are now clearly false assumptions. It is especially worrying that ministers cannot tell how many properties, and therefore tenants, could potentially be adversely affected by their policies” says RLA chairman Alan Ward.
“We need more homes to rent to meet growing demand. It is time that the tax system encourages rather than stopped housing growth cold dead” he adds.
