Scottish Landlords criticise Treasury over tax changes

31
Aug

The Scottish Association of Landlords (SAL) and the Residential Landlords Association (RLA), representing 30,000 private landlords across Scotland, England and Wales, are working together to campaign against Government changes that could see rents rise and leave tenants facing homelessness.

An e-petition opposing the Government’s Summer Budget Proposals to change tax relief on finance charges for private residential landlords, which attracted over 20,000 signatures, has drawn a response from Government.

The Government maintains the move will affect fewer than 1 in 5 landlords, that residential property is a passive investment like shareholding, and that the interest relief is unfair as it is not available to homeowners.

However, the RLA and SAL assert that the move will affect many more landlords and tenants than claimed, forcing up rents, cutting supply and damaging the Private Rented Sector (PRS).

Scottish Association of Landlords chief executive, John Blackwood, said:

“The Government has failed to do its homework.  It is clear that these changes will affect many more landlords than suggested, and more importantly, many more properties and therefore tenants.  By taxing gross profit many small landlords will be pulled into a higher tax bracket and others will be forced to pay tax when they have made a trading loss.”

“We are disappointed that the UK Government seems to have failed to understand the damaging affect this could have on the PRS across the UK.  Recent surveys confirm that over half of landlords are considering raising rents as a result of this policy, while others are considering selling properties, leaving tenants homeless.  The supply of private rented housing will shrink, forcing rents up further and leave already-struggling local authorities unable to cope with housing demand.”

“In Scotland, the report recently published by the Commission on Housing and Welfare makes several very helpful suggestions that landlords, letting agents and investors can help tackle the strategic housing crisis and was broadly welcomed by all sides and political parties in Scotland.  The report proposed measures such as involving private landlords in new-build programmes and attracting institutional investors to provide funds for new houses for the private rented sector, rather than just for house-buyers.  The move by the Chancellor can only decrease the extent to which the PRS can and will invest in these ways in Scotland and we would urge the UK Government to change its position.”

Alan Ward, chairman of the Residential Landlords Association added:

“The Government continues to peddle the line that letting out residential property is a passive investment, while piling on new regulations and responsibilities like immigration checks, minimum energy efficiency standards and licensing.  It is a false comparison.  The letting of residential property needs to be recognised as the trading business it is and be allowed to offset legitimate business costs, including mortgage interest.”

“Equally bogus is the comparison with homeowners.  As the Institute for Fiscal Studies has demonstrated, buy-to-let landlords are already taxed more heavily than homeowners.  Unlike homeowners, landlords pay income tax on rental profits and capital gains tax when a property is sold.  If the Government is going to make these sort of comparisons they should be honest and fair.” 

Notes to Editors

For more information, contact Graeme Downie on 07973 300 184 or email graeme.downie@orbit-comms.co.uk

Both the RLA and SAL are urging landlords to contact their local MPs.  The RLA has launched a dedicated tax campaign web site where landlords can quickly and easily e-mail their MP to raise their concerns.  They can also find out how badly the changes will affect them, sign the e-petition and find out more about tax for landlords.

Link to RLA Tax pages: http://www.rla.org.uk/landlord/lobbying/tax/index.shtml?ref=current-activity

Petition and Government response: https://petition.parliament.uk/petitions/104880/

About the Scottish Association of Landlords (SAL) – https://wwwscottishlandlords.com/

Established in 2001 having developed from various local groupings of landlords and letting agents, the Scottish Association of Landlords quickly grew to be the largest and only dedicated national landlords organisation representing landlords and agents throughout Scotland.

Through our fourteen local branches and with members from Shetland to Stranraer, the organisation has strong links with Scottish local authorities and actively campaigns at local and national level on behalf of members.  Our acclaimed training programme, delivered through sister organisation Landlord Accreditation Scotland (LAS), offers our members the opportunity to meet locally and learn from each other’s experience as well as gaining knowledge from some of the country’s most experienced industry trainers.

Policy, lobbying and campaigning has been an important aspect of SAL’s work since our inception. Our Policy & Parliamentary Affairs department works at the heart of government in the Scottish Parliament, as well as Westminster where relevant, with most of housing matters devolved to Holyrood.