Ian Duncan Smith is the latest Conservative to criticise his own government’s fiscal policies regarding buy to let.
Writing on the Conservative Home website, IDS says that there should be widespread concern over the fact that many landlords are reconsidering their investments as a result of changes such as the phasing out of mortgage interest tax relief and the stamp duty surcharge imposed on additional property purchases including buy to lets.
“We should all be concerned about this, because private landlords are a significant provider of the additional housing we need. We won’t be able to provide all the housing in the medium term through aggressive building programmes alone. We will need other sources of accommodation, as well” writes the former Conservative leader.
“Despite what has been said and written, [landlords are] not enormous property magnates, for the most part, but often people using the market to help provide retirement income in later life or assets to pass on to their children” he continues.
He then goes on to call for a series of incentives for private landlords, including VAT relief on conversions and additional capital allowances. He also urges a tax on empty homes in a bid to discourage ‘buy to leave’ foreign investors - IDS believes a similar measure in New York has led to a reduction in properties left vacant.
Then he issues a concluding rallying call in favour of the buy to let sector, saying: “We are now in danger of missing the point, for what is certain is that even if we do achieve our housebuilding target, there will still be a continuing growth in demand and a significant part of this will have to be available through private landlords. It is time to review Osborne’s tax changes on buy to let landlords.”
You can see his full article here.