With rental demand continuing to heavily outweigh supply Propertymark is once again calling on the government to do more to encourage investment in the private rented sector by repelling Section 24 and the phasing out of mortgage interest relief.
The Treasury made £14.3bn in capital gains tax in the 2020/21 tax year, taking contributions from a total of 323,000 taxpayers with the current rate set at 28% for buy-to-let properties. However, this money can no longer call upon by the UK government and the trade body has called for them to adopt more sustainable tax measures for landlords.
Propertymark believes that a generous estimate of reintroducing mortgage interest relief would cost the UK government £1bn. However, not only would this increase supply and drive down rents but would be a medium-term commitment to reducing the £30bn spent annually on housing benefits, which is between £8bn and £10bn more than the Office for Budget Responsibility forecast.
Timothy Douglas, head of policy and campaigns, commented “The property industry is uniquely placed to support the levelling up of our country and communities as we build back better from the social and economic impacts of both the coronavirus pandemic and the ongoing cost of living crisis.
“The industry can also make a significant contribution to increasing supply to meet the demand in the private rented sector by incentivising landlords to enter and stay in the market by repelling Section 24 with the reintroduction of mortgage interest relief. Our budget asks will also contribute towards increasing housing options and supporting landlords and homeowners reach net zero through grants.”
In an effort to help boost investment in the buy-to-let sector, a petition calling on the government to reverse its Section 24 tax changes for BTL landlords was launched last month.
Simon Foster, who launched the petition, also wants the government to reinstate the ability of landlords to set the full amount of mortgage interest against rental income, before tax is calculated.
His petition has reached almost 32,000 signatures so far and will run until 10 May 2023.
Government responds to petition for landlord tax relief to be reinstated
