Following last week’s wish list to the Chancellor from the Residential Landlords Association (RLA), the National Landlords Association (NLA) has issued its own Budget wish list ahead of the announcement in March.
The group has once again expressed its opposition to forthcoming changes to tax relief on finance costs, as the Chancellor prepares to offer his Spring Budget on 8th March 2017.
Now the NLA has Issued its Budget Wish List
The current rules that allow landlords to offset all of their finance costs, including mortgage interest, against tax will, from 6th April this year, be phased out to the basic rate of tax.
By April 2020, the consequences of Section 24 of the Finance Act 2016 will mean that it is likely that higher rate taxpayers will only receive 50% of the relief that they current get, which will limit their rental returns, as they will be required to pay significantly more Income Tax.
The NLA has also issued three demands in its Budget wish list – around half of the number of requests the RLA made – acknowledging that the Government’s priorities lie elsewhere.
The organisation recognises that the Government is “preoccupied with Brexit” while the country’s finances are “stretched to breaking point”, with “multiple demands and unacceptably high debt levels”.
A statement from the NLA continued: “Therefore, whilst drawing attention to our past submissions, in which we suggested alternatives to Section 24, in this submission, we have only asked for three very specific things.”
The NLA’s Budget wish list is as follows:
- Introduce a Capital Gains Tax (CGT) cut or taper
The NLA argues that this will help to facilitate the disposal of poorly performing property investments, and diversify people’s financial investment portfolios. The group has sent costings to the Treasury, which show that this measure does not need to be as expensive as some fear.
- Extend business asset rollover relief to allow restructuring of portfolios
The organisation argues that this will enable increased property sales and greater mobility between tenures, while allowing landlords to reduce the gearing of their portfolios, thereby protecting against market shocks and improving stability.
- Reintroduce the Landlords’ Energy Saving Allowance (LESA)
From April 2018, new tenancies will not be able to be granted for properties with Energy Performance Certificate (EPC) ratings of F or G. Following the collapse of the Green Deal, the NLA is urging the Government to help mitigate the major capital costs that over 300,000 landlords are facing in order to stick to the law.
What do you think of the NLA’s Budget wish list?