Changes to tax system could help landlords carry out home improvements
The government has been urged to change the tax system to help incentivise owners of buy-to-let properties to carry out improvements.
According to Chris Horne, editor of landlord advice site Property Hawk, there is currently little to encourage landlords to make improvements to their properties.
"The tax system is set up so that you can offset those capital costs against capital values, but those are only realised if the landlord was to ever sell the property," he said.
"In the short-term, there is very little incentive for a landlord to invest and improve their property, which results in rental property sometimes being in a worse condition than some properties in the owner-occupier sector."
Under the current tax system, buy-to-let property ownership is classed as an investment, rather than a business.
This means that, while other companies can offset capital expenditure against earnings, landlords cannot.
Mr Horne argued that this is something that the government needs to change.
"The way that rental properties are taxed should be changed so that it encourages landlords to invest in their properties by being able to offset improvement costs against rental income and against other incomes received as well," he said.
"At the moment, you can't offset any improvement works against income tax, so therefore, to a degree there is very little incentive to actually invest and improve your property."
This could become increasingly important given the rising number of people who are turning to the private-rented market.
According to a recent study by the Department for Communities and Local Government, the number of private renters has increased from 2.15 million in 2003-04 to 3.35 million in 2009-10, a rise of 55 per cent.
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