May

Boris mulling lower CGT for landlords to persuade more ‘accidentals’ out of PRS

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Boris Johnson is reportedly looking at ways to shrink the amateur end of the PRS by giving accidental landlords incentives to sell up – a plan doomed only to drive up rents, says the NRLA.

Media reports describe Whitehall officials’ plans to tempt buy-to-let landlords into selling properties to first-time buyers by charging lower capital gains tax.

The Daily Mail says that although in the very early stages, the Prime Minister is keen to do something radical on housing before the next election.

Landlords currently pay 18% on any gain as a basic rate taxpayer or 28% as a higher rate taxpayer.

The Scottish Sun adds that ministers reckon large numbers of accidental landlords are helping to strangle housing supply; indeed, the latest English Housing Survey reports that 45% of landlords have just one rental property or 21% of the private rented sector.

The Sun quotes a source close to the discussions as saying: “The Prime Minister wants to shrink the buy-to-let market”.

Chris Norris (pictured), NRLA policy director, tells LandlordZONE that there appears to be a worrying lack of strategy and coherence in government thinking.

“What we know is that the demand for rented housing is outstripping supply,” says Norris. “Cutting supply further and driving up rents is hardly going to make it easier for aspiring homeowners to save for a home of their own.

“Instead, the government should scrap the nonsensical tax paid when landlords create new housing. As well as easing the supply problem, this would bolster Treasury coffers to the tune of £10 billion as a result of increased income and corporation tax receipts.”

Read: The complete guide to CGT to landlords.

Whitehall officials have also suggested doing more to help young people by persuading older people to move out of their family-sized houses into smaller homes better suited to their needs by reducing the amount of stamp duty that pensioners have to pay if they move to a smaller home.

Read more about CGT reform.

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