Thinktanks urges ministers to introduce landlord tax relief
A good landlord tax could be introduced in next month’s budget that aims to benefit both landlord and tenant.
The proposal is being considered by chancellor Philip Hammond as an attempt to tackle the housing crisis that has left 40% of young adults unable to afford to buy their own.
The Treasury’s “good landlord” tax break would reward investors who sell properties to sitting tenants by waiving the capital gains tax.
The new plan would give buy-to-let properties 100% capital gains tax relief if the home is sold to a tenant who has lived there for at least three years, with the profit split equally with the tenant, who could use it as part of their mortgage deposit.
The £1.3bn-a-year cost of the policy could be offset by curbing other buy-to-let benefits, according to the thinktank Onward who drew up the plan.
The thinktank estimates that the average gain per property would be £15,000, meaning a first-time buyer and a landlord could expect to benefit by £7,500 each.
Both parties could receive as much as £19,500 for properties in London under the scheme.
Onward estimate 88,000 households could take up the relief each year, meaning nearly half a million households could get their foot on the ladder over five years.
The scheme could also curb the shortage of buy-to-let properties as more and more landlords sell up, and would-be investors are put off, due to rising costs and increased legislation.
Discount Landlord provides a range of specialist insurance products to help you protect your investment.
Call 0800 294 4522 to buy or get a Quote!