Independent body, the Institute for Fiscal Studies (IFS), has stated that the Treasury’s analysis of the rental market is wrong.
Of the Chancellor’s decision to reduce mortgage interest tax relief for landlords, IFS Director Paul Johnson says: “At present, if you own a property that you let out to tenants, you can set any mortgage interest costs against tax due on rent received.
“The Budget red book states that this means that ‘the current tax system supports landlords over and above ordinary homeowners’ and that it ‘puts investing in a rental property at an advantage’.
“This line of argument is plain wrong.”
Johnson explains: “Rental property is taxed more heavily than owner-occupied property.
“There is a big problem in the property market making it difficult for young people to buy and pushing up rents. The problem is a lack of supply. This change will not solve that problem.”1