Propertymark has told Chancellor Rachel Reeves that tax hikes will directly hurt the private rental sector and its tenants m.
In the last Budget, Capital Gains Tax rates rose from 10% to 18% for lower-rate taxpayers and from 20% to 24% for higher-rate taxpayers.
Extending Capital Gains Tax to new asset classes, such as primary and secondary homes – as the government has suggested – would risk further stagnation in the property market, says Propertymark in its submission to the Chancellor ahead of next month’s Budget.
The agents’ trade body writes: “The PRS has been overburdened by regulation and taxation in the last decade. Section 24 tax changes, higher stamp duty surcharges, and the loss of wear and tear allowances have created a challenging environment for landlords.
“This has made it harder for small investors to enter the market and discouraged existing landlords from actively improving their properties, contributing to undersupply, stagnating standards, and rising rent costs.
“To restore balance and encourage investment, the UK Government should:
- Review all taxes affecting private landlords, to support long-term investment and stabilise supply;
- Reinstate full mortgage interest tax relief to level the playing field between individual and corporate landlords;
- Reduce additional property taxes on buy-to-let homes, ensuring second homes and holiday lets bear higher rates instead;
- Unify Capital Gains Tax rates for residential property with other assets, removing distortions;
- Reintroduce the Landlord’s Energy Saving Allowance (LESA) to help fund energy efficiency improvements.”
Propertymark also strongly cautions against any proposal to apply National Insurance contributions to rental income; such a move would worsen affordability and drive landlords out of the market.
