Landlords can breathe a sigh of relief following the government’s Budget, as the Chancellor refrained from introducing any further tax changes on landlords.
It’s something the government has frequently imposed in recent Budgets, notably including a reduction in the tax relief that they can claim and a three per cent stamp duty surcharge.
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Perks for landlords offering longer tenancies?
The only explicit mention of landlords in Philip Hammond’s Budget speech referred to the launch of a consultation into encouraging landlords to offer longer-term tenancies.
He said: “We will launch a consultation on barriers to longer tenancies in the private rented sector, and how we might encourage landlords to offer them to those tenants who want the extra security.”
Industry experts are supportive of longer tenancies, especially if they’re combined with attractive tax perks – such as tax relief for those landlords offering such deals.
This would be a reversal in current policy, where the tax relief claimed by landlords is being reduced (and replaced with a 20 per cent tax credit) over the four years to 2020.
David Cox, chief executive of ARLA Propertymark – the trade body for the lettings industry – welcomed the consultation on longer tenancies, saying: “The government needs to work towards one over-reaching strategy and get this right, rather than make individual big populist announcements.”
A focus on first-time buyers
The Chancellor chose to focus on first-time buyers in his speech, abolishing stamp duty on the homes they buy, up to the value of £300,000.
The move is aimed at helping young people who are struggling to get onto the property ladder, and will also apply to homes worth up to half a million pounds in wealthier areas such as London. It means they will only face charges on the £200,000 difference.
The government has also promised to do whatever it takes to get more homes built, including cracking down on ‘land-banking’ and underwriting loans to small house builders.
Budget 2017 announcements: a summary for landlords
Despite landlords featuring less than in recent years, there were still several points of note.
Check out our quick breakdown of the announcements that could most affect landlords.
Capital Gains Tax – The announced 30-day payment window for capital gains will be deferred until April 2020.
Income tax – The higher rate threshold will rise from £45,000 to £46,350. Personal allowance will also be increased, from £11,500 to £11,850.
Empty homes premium – Local authorities will have the power to increase council tax premiums from 50 to 100 per cent on empty homes.
Long-term tenancies – Following the RLA’s proposal for incentivising long-term lettings, the government have pledged a follow-up consultation.
Rent-a-room relief – In another attempt to encourage long-term tenancies, the government will look to establish how rent-a-room relief is being used.
Rent payments – In what could prove good news for landlords, tenants could be encouraged further to meet rental payments on time. The government want to ensure first-time buyers’ history of paying their rent on time is recognised in credit scores and mortgage applications.