Ahead of the upcoming party conference season, Daniel Evans, chair of the Association of Independent Inventory Clerks, is urging all political parties to reconsider current tax policies affecting landlords.
According to Evans, these policies are the leading cause of an increasing exodus of landlords from the Private Rented Sector (PRS).
Evans highlighted the financial strain imposed by recent tax changes, arguing that they have rendered many landlord businesses unprofitable. “It’s been open season on landlords for far too long, causing untold damage to the PRS,” he said. “Even though rents are on the rise, landlords are exiting the market, which is unsustainable. Their profits are being eroded by burdensome tax obligations.”
Currently, landlords face multiple layers of taxation. In England and Northern Ireland, a 3% Stamp Duty Land Tax is levied at the point of purchase for any buy-to-let property. Mortgage interest payments are no longer fully tax deductible, replaced by a 20% tax credit. Moreover, landlords selling their properties are subject to Capital Gains Tax, the personal allowance for which will decrease from £6,000 to £3,000 next April. Comparable measures are in place in Scotland and Wales.
The subject of housing and landlord taxation is expected to feature prominently in the party conferences. The Liberal Democrats will initiate the season in Bournemouth on 23rd September, with a scheduled debate on the housing crisis two days later. Their proposals include a national register for landlords, minimum standards, and a fair share of tax payment for investment property owners.
The Conservatives will convene in Manchester on October 1st. Chancellor Jeremy Hunt has already indicated that his Autumn Statement would not include tax cuts if inflation remains high. The Labour Party’s conference in Liverpool in October will also be closely watched. Shadow Chancellor Rachel Reeves has ruled out any increases in Capital Gains Tax, as well as rejecting a ‘mansion tax’ or wealth and income tax increases.
Evans emphasised the crisis in the PRS, stating that the sector is a special case that deserves focused attention. “The UK is facing a chronic undersupply of homes, and continued exit of landlords will only exacerbate the situation for tenants,” he said. “What landlords are asking for is a level playing field to conduct their business, which shouldn’t be too much to ask.”
