The Tory leadership contest is well underway with just two candidates - Boris Johnson and Jeremy Hunt - left in the race. But while the two are vying to succeed Prime Minister Theresa May, with the result due on July 23, speculation is growing over who could be the UK’s next Chancellor?
Whoever replaces Philip Hammond as Chancellor of the Exchequer will almost certainly look to hold an emergency budget with a view to offering a change of fiscal direction, and this an opportunity to reverse punitive tax policies in order to increase much needed housing supply the private rental sector.
Paul Sloan, operations director for haart, said: “With a new Chancellor, we will repeat our calls for changes to current policy to support improvements in the PRS.
“In particular, the taxation changes impacting private landlords have been relentless. We would suggest that a rethink on those taxes would be a very good place to start.”
Draconian tax changes applying to buy-to-let investors has left a number of private landlords with little alternative but to evict tenants and sell properties en masse or simply increase rents for tenants.
There is plenty of evidence to suggest that some landlords have not been able to cope with punitive tax hikes introduced by former Chancellor George Osborne, including the phasing out of mortgage interest relief.
Many private landlords have also had to endure the scrapping of the ‘wear and tear’ allowance for furnished properties, the launch of the 3% stamp duty surcharge, as well as the introduction of stress tests for buy-to-let mortgages.
Sloan continued: “Whether it’s the additional Stamp Duty Land Tax levied on purchasers’ second and subsequent homes, the phased reduction in tax relief allowable against mortgage payments, or the loss of the wear and tear allowance, life has grown significantly harder for landlords over the past few years.
“We must ensure that private landlords who are providing homes for millions of households across the UK feel able to remain in this sector.
“With the appointment of a new prime minister and Chancellor, we will be redoubling our efforts to act as the voice of private landlords across the country.
“For the time being though, we can only wait and see what the next few weeks and months have in store for the sector.”
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Not a chance in hell of that happening, increase rents to cover extra costs, only way.
Incorporate like I have is another way I have been running mine for two years and it’s the best thing I have ever done
Incorporation means you have to pay 20% tax on profits plus 37.5% tax on dividends if you are a higher rate tax payer, not to mention all the extra obligations that come with running a company. Is that really worth it vs being a private landlord, even under the current regime?
It is well worth it compared to s24 I have 80 units so was a no brainer as long as you keep dividends to basic rate you can also take directors loans. You must be in partnership to benefit from incorporation relief. I know many landlords that have done the same it’s based on circumstances and size of portfolio etc . Can’t recommend enough. You also have your tax free allowance the difference in tax compared to s24 was huge when it fully kicks in. You can also share with partners aswell to split dividends etc
Just by removing the fiscally dragged HRT threshold for any earnings below £80000 would remove most S24 LL from S24 effects.
So whether by design or accident such a policy would negate the effects of S24.
Raising the HRT threshold also would mean that Govt won't be seen as directly assisting LL.
This is perhaps the best that S24 LL can expect.
It matters not how achieved as long as effectively turnover ISN'T taxed.
For those that would still be affected converting to corporate status might be their solution.
Watch our mate Boris remove SD for homes up to half a million and reduce Busieness Rates
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