A leading Conservative peer says the government should cut taxes for buy to let investors and regard them as part of the solution to the housing crisis - not part of the problem itself.
Lord Howard Flight, who in the past has spoken out against his own party’s fiscal measures against the private rental sector, writes on the influential Conservative Home website that “at the very least” the Theresa May government should scrap the additional homes three per cent stamp duty surcharge on buy to let purchases.
“Otherwise we are effectively taxing the growth in the supply of housing” he says.
In addition he urges the government to look seriously at tax incentives for landlords prepared to offer longer-term tenancies.
“It is somewhat illogical for the tax system, as it currently does, to make it more attractive for a landlord to switch properties to short term holiday lets than to continue providing homes for long term rental” he writes.
In addition he wants ministers to consider providing landlords with Capital Gains Tax relief where they sell a property to a sitting tenant to become a home owner.
Lord Flight’s demands come towards the end of a lengthy article where he sings the praises of former Chancellor Nigel Lawson - a leading member of the Thatcher governments in the 1980s - who created a benign fiscal landscape for buy to let, which was then an emerging investment sector for individuals.
He contrasts Lawson’s approach with that of the current government since 2015; from that time, Flight says, “the private rental market has faced an onslaught of tax hikes, restricting mortgage interest relief to the basic rate of income tax, putting a premium stamp duty levy on the purchase of new homes to rent; not extending the 20 per cent rate of capital gains tax to residential property and taxing a landlord’s turnover rather than profit, unlike any other business sector.”
He says the government’s rationale for what he calls “this assault” was to expand the stock of homes available to buyers.
But he adds: “It is, however, a nonsense to blame private landlords for the housing crisis – rather the large increase in private rented properties over the last decade has alleviated the shortage of residential accommodation.”
You can read the full article here.