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Finally, some positive tax relief news for landlords! Could this help buy-to-let rebound?

For UK landlords, the taxman has morphed into the bogeyman in recent years, hiking stamp duty and reducing the tax breaks available for buy-to-let owners as part of the government’s uphill battle to make homes available for first-time buyers and thus soothe the housing crisis.

First HM Revenues and Customs came for the Wear and Tear Allowance that it switched out in favour of Replacement Relief in the 2016/17 tax year. Then the following year it introduced a phased reduction in mortgage interest tax relief on rental mortgages before the benefit is totally eradicated in 2020/21. And more recently in late 2018, the government launched plans to also eradicate tax breaks on capital gains when certain properties are sold. This will affect people who once lived in a now-rented-out property and will reduce returns when the home in question is sold.

Fun in the sun? In a turn up for the books, though, news emerged from the corridors of power this week to finally put a smile on the face of many buy-to-let investors.

In a Westminster debate discussing steps to help regenerate dilapidated seaside resorts, a House of Lords committee suggested that, along with measures like improving transport links, boosting digital connectivity and reviewing flood defence investment, government should consider introducing tax breaks for landlords in these areas.

More specifically peers recommended “the introduction of stronger incentives for private landlords to improve the quality and design of their properties,” measures that “might include tax relief for making improvements to properties.”

Don’t break out the bubbly yet Clearly these are just suggestions and remain a long way off from being signed off by the Treasury. And what’s more, these proposed changes would only benefit those investors whose properties are (or would be) located on the coast, individuals who comprise a very small slice of the overall pie.

This news is a much-needed step in the right direction for the sector, though, given that recent tax changes have solely served to penalise landlords. The committee’s findings were certainly celebrated by the Residential Landlords Association, which “welcome[d] the recognition this report gives to supporting landlords to invest in raising the standard of housing for their tenants” and which added that “we call on the government to accept this proposal.”

Let’s hypothesise for a moment and imagine that those recommended tax breaks do indeed come into force. Can it be argued that they would make buy-to-let investment in holiday resorts that much better on balance, given the raft of adverse tax changes I mentioned at the top of the piece? Certainly not, I would say. In fact, irrespective of this week’s news, legislative changes in the months and indeed years ahead are likely to remain mostly detrimental to landlords as the government takes action to solve the housing shortage. This is why I’m giving buy-to-let a wide berth and will continue to do so.

Source: Investing

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Theresa May vows stamp duty hike on foreign-owned properties in bid to tackle housing crisis

Theresa May has unveiled plans for a new levy to be paid by those buying British homes from abroad as part of a wider bid to tackle Britain’s housing crisis.

The Prime Minister kicked off the Tory conference today by insisting it should not be “as easy” for foreign investors to pick off the UK’s housing stock as those who live and work there.

The rise of up to 3% in stamp duty will be paid by individuals and companies not paying tax in the UK, with the cash raised to go towards boosting the government’s rough sleeping strategy.

The PM will reignite her pledge for a “British dream” with a series of policy announcements that will try to divert focus away from heightened party splits on Brexit.

“At Conservative conference last year, I said I would dedicate my premiership to restoring the British Dream, that life should be better for each new generation, and that means fixing our broken housing market,” she said ahead of the four-day event in Birmingham.

“Britain will always be open to people who want to live, work and build a life here.

“But it cannot be right that it is as easy for individuals who don’t live in the UK, as well as foreign based companies, to buy homes as hard working British residents.”

“For too many people the dream of home ownership has become all too distant and the indignity of rough sleeping remains all too real.”

A Tory spokesperson said the rise in stamp duty, which will apply on top of existing rates, will “help make UK homes more affordable for British residents and those paying taxes in the country as they build a new life here”.

‘THE FESTIVAL’

Meanwhile the PM has unveiled plans for a festival to take place in 2022 that will celebrate the country’s culture, sports and innovation.

The move to celebrate the “precious union” of the UK – known as The Festival – is expected to echo the Great Exhibition of 1851 and the 1951 Festival of Britain.

Ministers have so far earmarked £120m for he proposal.

The event will come just months ahead of the next scheduled general election and will coincide with the year of the Queen’s platinum jubilee and the Commonwealth Games in Birmingham.

Mrs May said: “Almost 70 years ago the Festival of Britain stood as a symbol of change. Britain once again stands on the cusp of a new future as an outward facing global trading nation.

“And, just as millions of Britons celebrated their nation’s great achievements in 1951, we want to showcase what makes our country great today.

“We want to capture that spirit for a new generation, celebrate our nation’s diversity and talent and mark this moment of national renewal with a once-in-a-generation celebration.”

‘BACK CHEQUERS’

Mrs May’s plans came alongside a call for warring MPs to stop “playing politics” and back Chequers.

In an interview with The Sunday Times ahead of the conference, the PM took a swing at senior figures such as Boris Johnson – who launched a fresh attack on Mrs May as Tory conference got underway – by calling on them to back the “only proposal on the table at the moment”.

“My message to the Conservative Party is going to be that people voted to leave the EU. I believe it’s a matter of trust in politicians that we deliver on that vote for people,” she said.

“We’re the party that always puts country first and puts the national interest first. And that’s what I want us to be doing.

“The only proposal on the table at the moment that delivers that is the Chequers plan.”

Source: Politics Home

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Buy-to-let landlords may face another stamp duty hike

The government is planning more stamp duty on homes purchased for rent in order to ease the housing crisis, according to reports. Buy-to-let landlords may face a hike on the additional 3% stamp duty rate they have to pay when buying a property, according to The Sun newspaper.

In his column, political writer James Forsyth revealed that one option being considered to raise money ahead of the Budget this autumn is a further increase in the stamp duty rate for buy-to-let properties.

“This would raise money for the Exchequer and help to keep house prices down. But if the Government is serious about helping more people on to the property ladder, as opposed to just raising yet more money from stamp duty, then what’s needed is changes to the planning laws to get far more homes built where people want to live,” he wrote.

In April 2016, a 3% stamp duty surcharge was introduced by then Chancellor George Osborne on additional homes – that is, both buy to lets and holiday homes. According to last week’s analysis of HMRC stamp duty statistics, receipts for the second quarter to June 2018 were 13.8% down to £317m, compared with the same period a year ago.

In last year’s Autumn Budget, stamp duty land tax (SDLT) on homes under £300,000 was abolished for first-time buyers from 22 November 2017.

This means that first-time buyers of homes worth between £300,000 and £500,000 do not pay stamp duty on the first £300,000. They pay the normal rates of stamp duty on the price above that, with no relief for those buying properties over £500,000.

Source: Your Money