In the same week that Landlord Today reports one in four buy-to-let landlords is hoping to expand their property portfolio this year, the Treasury has announced it is to “seek views about capital gains tax”. This sounds ominous for those same BTL landlords and has prompted speculation that Chancellor Rishi Sunak is planning a tax hike for second homeowners, including people with buy-to-let properties.
With a gaping hole in the country’s finances – which could be as much as £350bn – it’s pretty obvious that the Chancellor needs to claw back that money somehow. So taxes are in the spotlight. Landlords may be able to take comfort from the fact that the Chancellor has said the review is just an administrative formality. But with Rightmove reporting that rental demand is 40% higher than this time last year, any additional taxation that could damage supply looks a very bad decision indeed.
Landlords, who are already under the cosh from this year’s CGT changes, as well as the Tenant Fees Act and a range of new regulations now in force, are likely to quickly offload their rental homes if they are no longer viable and move their investment elsewhere. At a time when the government is trying to support the housing market and make it easier for people to buy, anything that could push up prices by flooding the market with properties looks counterproductive.
If the Government is serious about boosting the housing market recovery and delivering more rental homes, we think it should exempt buy-to-let landlords from any increase in CGT.
The taxpayer will ultimately have to foot the bill for the economic downturn resulting from the pandemic. But how the government will choose to distribute the tax changes that will be needed is still uncertain.
We may not be able to do anything about CGT rates – but we can help if you’re unsure about compliance. To give landlords peace of mind that they need never fall foul of the rental regulations again, we’ve developed a great new cloud-based lettings platform that takes all the hassle out of compliance. PlanetRent has a simple dashboard to help you manage compliance for one property or a whole portfolio. So if you are worried about complying with all the regulations that you need to be aware of, why not download it today. See all the great features we’ve included here and give it a try.
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