The exemption of residential property from the new Capital Gains Tax cuts tops the list of concerns expressed by professional landlords for the health of the sector over the next 12 months, according to new research.
Some 63 per cent of landlords surveyed by lender Amicus cited the chancellor George Osborne’s decision to maintain existing CGT rates on residential property sales while reducing them by eight per cent on assets, as their biggest challenge.
In a close second place, on 61 per cent, is the abolition of tax relief on mortgage interest, which means that landlords will no longer be able to claim tax relief worth 40 or 45 per cent of the interest payments on their buy-to-let mortgages.
Instead, the maximum tax relief will be set at 20 per cent with the change being introduced over a four-year period.
This was followed by the tax changes to maintenance and improvements (57 per cent), whereby landlords will only be able to claim for ‘wear and tear’ costs actually incurred on replacing furnishings when calculating taxable profits.
Increasing costs being passed on from the Right to Rent legislation (53 per cent) and rising legal and accountancy fees (52 per cent) were in fourth and fifth places respectively.
Fewer than half (44 per cent) of landlords expressed concern about the impact of Brexit and only a third (34 per cent) are worried about accessing long term finance to grow their portfolios.
However, the survey was conducted across a small sample – just 187 landlords, in April.
