Sugar’s taxed, but not so sweet for landlords

After last year’s Budget Statement we suggested that if the Chancellor wants to do away with private landlords, he should just come out and say it.

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Well it looks like we got our wish.

Today the Chancellor made it abundantly clear we are not welcome, in fact he made a couple of telling statements which outline his opinion of landlords.

Firstly, he said that this government will “tax the things it wants to reduce, not the things it wants to encourage”.

On which basis landlords are obviously considered surplus to requirements.

Secondly, page 48 of the Red Book states – when referring to the fact that sales of residential property will be excluded from the reduction in CGT rates – that “This will ensure that CGT provides an incentive to invest in companies over property”.

A clear cut statement that the Government does not want investment in residential property.

Unfortunately the policy announced in Mr Osborne’s Budget make for even worse reading than the rhetoric.

The 3 per cent SDLT announced last year was confirmed, as was the decision not to provide any exemptions for larger or corporate landlords. Surprisingly this will hurt not just smaller landlords looking to invest for their retirement but large funds looking to enter the market. Details of which can be found here.

Agonisingly close to what we have been calling for, Capital Gain Tax (CGT) rates will be reduced to 10 per cent for basic rate tax payers and 20 per cent for higher earners. This represents a significant 8 per cent reduction. However, an 8 per cent levy is to be introduced on the sale of residential property meaning that landlords’ CGT bills will remain unaffected.

On a slightly more positive note the Chancellor did announce that the personal tax free allowance is to increase to £11,500 and the threshold for the higher rate of Income Tax will be set at £45,000 from April 2017. Additionally HMRC are to publish, and consult on, plans to ‘simplify’ landlords’ tax payments as part of the proposed quarterly ‘pay-as-you-go’ digitisation of returns.

Osborne also announced a tax allowance of £1,000 pa for ‘digital entrepreneurs’ making a small profit from trading related to property online. Apparently it is ok for amateurs with no-grounding in the law or best practice to let property through AirBNB (or similar) but not for established property professionals.

For those more interested in Corporations Tax than personal income, the news was good. Corporation Tax rates will drop to 17 per cent in 2020 – down an incredible 11 per cent in a decade.

Above all, and perhaps the most significant good news of the day, beer, cider and whisky taxes will remain frozen for another year. So at least we can drink to blot out the memory of another disastrous Budget for landlords.

Cheers George!


For more details click here to download the NLA Budget Briefing 2016


8 thoughts on “Sugar’s taxed, but not so sweet for landlords

  1. I cannot understand why the NLA is not taking the govt to court in relation to the unfair and illegal proposed mortgage interest tax changes. Why is it up to private individuals to do what the largest landlord organisation will not touch with a barge pole? I sometimes think that the NLA is more interested in being seem to be cosy with the govt than representing Landlords interests properly.

    1. Having 20 years experience of NLA (and SLA up to 2003), nothing has changed with regards to how landlords are viewed by the law. Best summed up by “Rolls-Royce drivers complaining about the price of petrol”.

      These disastrous policies are being dreamt up by envious civil servants at The Treasury. All of whom live in or near London. None of those creating these policies, will be around to deal with the consequences. Higher rents and fewer LHA properties.

      We could waste hard earned member’s monies on barristers who will never tell you that you are wasting your time. Why should they? You are paying the bill.

      The legal route was tried, through the NFRL, in the 1990s with regard to Housing Benefit, as it was then. Five of six cases were lost. One case that was successful, the government changed the law the next day.

      I put a stop to this approach.

      Has the rhetoric used by other organisations changed anything at all? No.

      The NLA is doing the best it can in the poisonous climate of a government who looks to tax those who cannot hit back.

      Insurance premium tax up from 6% to 9.5%, and now 10%.

    2. I absolutely concur. The NLA repeatedly bang on that property rental is a business, yet landlords are taxed as an investors: The costs incurred, the multiple laws to abide by, correctly reflect the NLA’s view. Yet if a plumber can claim for the borrowing cost of his van etc, why can’t landlords? This is unfair discrimination.
      WHY, OH WHY does the NLA not stop faffing about and go straight to the Euro Court of Human Rights on this? The Gov have clearly showed their hand, now the NLA should now show theirs. If not, the NLA are a sham / wash out. GET WITH THE PROGRAMME, NLA, AND BLOODY FIGHT BACK or stop taking our money. I WANT A PUBLISHED AND PERSONAL EMAIL REPLY.

  2. I was not thrilled to find they were supporting the exemption for lager or corporate landlords. So much for the “small landlords” association! I am looking at moving my membership to someone on my side…

  3. It’s time we have it out with the little sh*T. What he continues to show is his complete lack of understanding of the PRS. The majority of landlords are decent and caring as are the majority of tenants. It is only a small minority of both that lead to TV programs and press articles. We have been landlords for nearly a hundred years and have undertaken continuous capital investment in our properties and treated our tenants with due and proper regard even when some have been less than appreciative. The Chancellor fails to realise that without the PRS he would have many thousands on the streets of our cities. The council’s could house them financially and to be frank they couldn’t administrate that many either.
    It’s about time the little sh*T realised that without the PRS he would have the homeless at the door of 11 Downing Street. Mind you that at least would wake the bu**er up. The man’s an idiot just like the other 670 odd in the commons.
    Never had a proper job. Never really had to balance the books properly.

  4. NOT impressed NLA…. I have just read your post …

    By the same logic does the NLA suggest telling it’s/our children “if you are being abused by a bully, unless you can definitely beat the bully, shut up and let them kick you to death!”

    Surely ALL bullies should be confronted, (especially when their agenda is clearly your complete destruction) regardless of the arena or likelihood of success?!

    Come on NLA, for the £000’s / tens of £000’s these measures are going to cost each and every landlord over time, don’t you think you have a responsibility to your membership “grow a pair” and stand up to this bully-boy Govt. ?!!!

    The Govt has sentenced Landlords to a slow agonising death, and you have decided it’s not worth fighting. Thanks so much for your support!

    p.s. I guess the point has escaped your attention, but what point is there protecting the membership fund, if by so doing you stand idly by and allow the membership to die out, because if Landlords die out, so does the NLA!

  5. Wonder if many landlords will vote differently as a result of what is beginning to feel like persecution…

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