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Buy-to-let landlords have 'unfair tax advantages', claim

Buy-to-let landlords have 'unfair tax advantages', claim

Buy-to-let investors are unfairly competing against first-time buyers in the housing market thanks to generous tax treatment, according to a new report.

Think tank Intergenerational Foundation says in its report – Why BTL equals “Big Tax Let-Off” – that private landlords have tax advantages, and are exploiting loopholes in Capital Gains Tax.  

The think tank, which says it exists to protect young generations in future policy-making, says: “Without these tax advantages, less capital would probably be allocated towards the BTL sector as a result.

“This would reduce the unfair competition that currently exists between older landlords and younger first-time buyers within Britain’s extremely tight housing market.”

Landlords should pay Capital Gains Tax when they sell their rental property, but the Intergenerational Foundation says there is widespread advice on how to avoid this.

Strategies include living in the property for a short time before selling it, or getting a partner to claim letting relief and thus reduce the profit subject to tax.

The paper proposes that CGT should be deducted at source during property transactions.

National Landlords Association chief executive Richard Lambert criticised the findings.

He said: “I’ve yet to meet a landlord who thinks they are fairly taxed, never mind that the system might be slanted in their favour.”