Kevin Hollinrake - the founder of franchise agency Hunters and now a Conservative MP - is calling for a cut in the capital gains tax paid by any landlord who sells their rental property to a sitting tenant.
Hollinrake has made the call through an amendment to the Finance Bill.
In the Budget earlier this year the-then Chancellor, George Osborne, announced that the 28 per cent rate of capital gains tax would be cut to 20 per cent on the disposal of most assets - but he deliberately excluded residential property from this.
Many sectors of industry have complained about this exception, especially as it comes on top of changes to mortgage interest tax relief and the Wear & Tear allowance, all deemed to be adversely affecting buy to let investors.
Ahead of Hollinrake’s amendment, the Residential Landlords Association has called for an exception to be made that would encourage landlords who are ready to sell properties to do so in a way that meets the government’s objective to increase home ownership.
Hollinrake - who is MP for Thirsk and Malton - wants the CGT paid by landlords to also be at 20 per cent where they sell a property to a sitting tenant.
RLA research has found that 77 per cent of private landlords would consider selling their property to tenants if the tax liability was waived. This would suggest that many might be encouraged if the tax liability was reduced.
“Many landlords are now considering their future in the market following recent tax increases whilst others will be looking to sell as part of the natural churn of properties in the rental market” explains RLA policy director David Smith.
“This amendment would help achieve the government’s aim of encouraging and supporting home ownership for aspiring first time buyers whilst easing some of the excessive tax burdens recently placed on landlords” he adds.