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Autumn Budget can help free up rental homes to buy

Bishop Fleming has called for the Chancellor in his next Budget to assist residential landlords who wish to downsize their property portfolios as part of a policy to free up more rental properties for sale.

Andrew Browne, head of tax, Bishop Fleming, said it has been ‘all stick and no carrot’ from Philip Hammond so far. Landlords are taking a hit from the government capping mortgage tax relief, implementing a 3% stamp duty surcharge and removing the ‘wear and tear’ allowance.

He commented: “What the government has not done is to make it easier for those landlords to downsize their portfolios, or leave the sector completely, without incurring massive tax penalties.”


Landlords are also facing stricter mortgage lending criteria and a Capital Gains Tax (CGT) bill of up to 28% on any gains they make on property transactions. In the past, any increase in value through inflation would have been removed with indexation relief, and any gains would have been tapered. The government has since then withdrawn these reliefs, with indexation relief still available to companies.

Browne said the landlords who may have purchased their properties many decades ago are facing a ‘punitive retrospective tax’ created by the withdrawal of these reliefs. He commented: “Inflationary pressures are outside the control of landlords, so it is unfair that they should not get some measure of relief from gains that have arisen simply through inflation.”

The firm suggested it is possible to reintroduce these reliefs, as well as the Chancellor announcing further measures, such as widening the scope of Entrepreneurs’ Relief that lessens the CGT rate to 10% and enabling residential landlords to access the same ‘roll-over’ relief that other businesses enjoy.

Homeowners are able to pay less in mortgage interest than those paying rent due to low interest rates, Browne explained. He added that if the government wish to help young people get on the property ladder, it also needs to consider recent disadvantages in the buy-to-let market and fulfil its promise to make more housing available to buy using the tax system.


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