The National Landlords Association (NLA) has warned that costs in the private rented sector could rise by up to £2.6bn if buy-to let mortgage interest payments are made non tax-deductible.
In a letter to the Chancellor ahead of today’s Budget, the NLA’s chief executive officer Richard Lambert said that making mortgage interest payments non tax-deductible would be the last thing the UK economy needs and would only put greater pressure on the cost of housing.
The letter also outlines the contributions that landlords make to the UK economy by means of their support for the housing industry and through direct contributions in the form of tax.
Lambert said: “It has been suggested that private landlords receive too many ‘perks’ or reliefs which give them an unfair advantage compared to owner-occupiers, but this ignores the fact that letting residential property for profit is a business.
“No business pays tax on their gross turnover alone so why should landlords be treated any differently?
“Removing their ability to deduct legitimate costs before declaring their taxable profit would essentially force them to suck up one of the most significant expenses they face in being able to provide homes for others.”
Using figures from the Council of Mortgage Lenders reported at the end of 2014, the NLA estimates that costs in the private rented sector could rise by as much as £2.6bn if mortgage interest payments were to be reclassified as non-deductible: a move it warns would leave landlords with no other option than to raise rents.
Lambert concluded the letter by seeking…“an unequivocal reassurance that the Government will continue to regard buy-to-let mortgage interest payments as a legitimate business cost, and give landlords the confidence and certainty to invest for the future.”