Buy-to-let landlords need clarity on tax in the Autumn Budget instead of confusing policy leaks, according to financial advisory firm Blick Rothenberg.
Tax increases have been the subject of intense speculation for months, with suggestions including changes to Capital Gains Tax rates, scrapping Stamp Duty and replacing it with a new national property tax and levying National Insurance on landlords’ rental income
Some of this appears to be ‘kite flying’ - the intentional leaking of policy ideas to gauge the strength of any potential backlash as Chancellor Rachel Reeves attempts to plug a £40 billion hole in the public finances.
Blick Rothenberg partner Heather Powell says this is extremely unhelpful. “It’s creating uncertainty in the property market, and unnecessary stress for landlords and their tenants,” she adds. “Instead of ‘kite flying’ the government should either confirm which taxes will or won’t happen in the Budget or keep quiet until 26th November.”
She believes the government’s position on National Insurance, Income Tax, Capital Gains Tax and Inheritance Tax needs to be made clear. “The change in the deduction for interest has already led to many buy-to-let landlords selling up, and the suggestion that National Insurance could be charged on rental income is causing many more to consider whether an ongoing buy to let portfolio, held personally, is viable.”
Powell adds: “The Chancellor needs to take care to ensure that the buy-to-let landlords with a few properties held personally are not driven out of the market as corporate landlords are not in a position to fill the shortfall in rental properties that would be generated by an exodus – and many renting properties are not in a position to buy.”
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