Dec

Propertymark calls for a moratorium on landlord tax increases

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Top of the wish list is a call out to government to pay the rents of those affected by COVID. Landlords (and tenants) have been on a real rollercoaster ride during the pandemic this year; they even had to shut down entirely during the first lockdown and they are still suffering with many in financial hardship.

The year has been particularly tough on landlords in the private rented sector (PRS). They were already facing increasing costs as a result of various pieces of legislation brought in over recent years resulting in more paperwork, higher taxes, and overall an increase in running costs.

Although there were measures to protect landlords by way of a mortgage holiday for those with cash flow problems, there was also a ban on evictions which has hit some landlords hard, especially those with possession claims in the pipeline when the ban was announced. Some unlucky landlords are facing the prospect of a full 12 months without getting a penny in rent.

Thankfully estate and lettings agents and removal firms are allowed to continue working during the tier 4 restrictions in England and that goes for landlords as well. Following the latest UK Government announcement, those people living in a tier 4 area must not leave or be outside of their home except for where they have a specific purpose or a ‘reasonable excuse’. Moving home and associated activities within the housing sector are deemed a ‘reasonable excuse’, therefore, agents and landlords can continue to work.

Property viewings are still allowed to take place as long the COVID-19 safety guidance is followed, which includes social distancing and wearing face masks or coverings. People are still allowed to move home, but according to the guidance anyone outside an individual family bubble should not help with moving unless it’s absolutely necessary.

ARLA Properetymark’s Mark Hayward told The Guardian: that he would like to see improvements made for the sector and he mentioned his main wishes:

“It’s been an unprecedented year for not just the buy-to-let sector, but the housing sector as a whole and we’re now sat in a very different place to this time last year.

“The Government has acknowledged the important role the buy-to-let sector plays in driving forward the economy, so we’re hopeful that our wish list for the sector will come to fruition.”

The list includes calls for the Government to pay the rents for those tenants affected by coronavirus and for this payment to be made direct to landlords.

Secondly, Propertymark is calling on the government to stop increasing the tax level for landlords. There have been strong rumours of swinging increases in Capital Gains Tax, a measure if it comes to fruition, would drive out a lot of buy to let landlords.

It’s not just the tax on the gain that worries landlords, if the speculation came about the gain could be added to income from other sources such as employment and would result in pushing many more into the higher rate tax band.

Mr Hayward said:

“It is vital the negative impacts of further taxes on an already penalised sector are considered and the Government must introduce initiatives to help tenants keep the rent flowing and the courts handle eviction cases.

“Additionally, new buy-to-let landlords should be encouraged through build-to-rent schemes. All of this will help boost the sector, encourage new landlords and help the private rented sector thrive in 2021.”

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