Property News. From Moving In.

Slash Capital Gains Tax on rental sales, Chancellor urged

A trade group’s submission to the Treasury ahead of next month’s Budget includes a call for the new Chancellor to slash Capital Gains Tax for landlords who sell their properties directly to their tenants.

The Residential Landlords Association and the National Landlords Association – which are due to merge – have jointly called on Rishi Sunak, who became Chancellor only last Thursday, to use his first Budget to reverse the decline in the supply of rented housing.

The RLA and the NLA want a fundamental review of the way rented housing is taxed to ensure that tax policy supports, rather than contradicts, government objectives. 

They propose that the stamp duty surcharge of three per cent is dropped where landlords add to the net supply of housing through developing new properties, bringing empty homes back into use, or converting large properties into smaller and more affordable units of accommodation.

They propose that tenants are supported into homeownership by introducing a Capital Gains Tax exemption where landlords sell a property to a sitting tenant. 

In addition, they call for tax relief where landlords invest in measures to improve the energy efficiency of a rented property or let adapted properties long-term to tenants with accessibility needs.

David Smith, RLA policy director, says: “The tax system for rented housing is failing. It encourages the provision of holiday homes over long-term properties to rent, it deters investment in new housing and provides no support to those wanting to make energy efficiency improvements.

“For the sake of those living in rented housing or who are looking for accommodation, Ministers need to use the Budget to urgently change course to ensure that their tax policies are positively aligned with their wider housing objectives to encourage good landlords to provide long-term affordable housing.”

And NLA director of policy and practice Chris Norris adds: “HM Treasury has constructed a series of barriers to investment, which make running an efficient and successful lettings business borderline impossible. Mr Sunak must recognise that housing costs can only be reduced by making it easier, not harder, to provide good quality rented homes.”

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Original Source: Letting Agent Today.

Original Author: Graham Norwood.

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https://www.lettingagenttoday.co.uk/breaking-news/2020/2/encourage-rental-property-sales-to-tenants-by-slashing-cgt—call-to-chancellor