There are calls for the Government to treat Landlords in a similar way to other small businesses by granting tax relief that would encourage them to reinvest, after selling their properties. Under the present tax structure, landlords can face bills of up to 28 per cent of the value when selling their property, which certainly makes the prospect of reinvesting money back in the market significantly less appealing.
Ian Potter, Operations Manager for ARLA, is urging Chancellor George Osborne to use the opportunity of the forthcoming budget to consider the introduction of such incentives, as he sees them as providing a boost to the private rented sector which would contribute to stimulating growth in the UK economy.
He commented ‘Landlords must be treated as the entrepreneurial businesses they have now become. Supporting growth and encouraging greater investment into the private rented sector will help boost our economy and is an open goal for the Chancellor. Demand for private rented housing continues to grow, with 3.4 million tenants living in the private rented sector - an increase of over one million tenants since 2005. The tax system can be used by the Government to incentivise investment in housing stock in the PRS, and therefore improve the conditions in which those 3.4 million tenants live. Landlords play a vitally important role in providing housing in the UK, however, they are not treated as businesses by the Treasury and therefore can't take advantage of tax relief available to other SME's when looking to reinvest in their portfolio. We have called on the Government to allow landlords to take advantage of the same level of roll-over relief available to other businesses when reinvesting in the private rented sector, and to only charge CGT on gains released from a business as profit.'
Should the Government decide to implement these proposals, many Landlords could use the opportunity to expand their portfolios taking advantage of these changes in a growing market.
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