Everyone, including buy-to-let landlords, faced a challenging year in 2020 – but what could make things easier for landlords in 2021?
The lettings body ARLA Propertymark has given three suggestions for changes the government could make to help landlords in 2021.
Its wishlist for 2021 includes calls for the government to pay the rents of tenants affected by coronavirus, more support for the courts on evictions, and a stop to any further tax hikes.
We take a closer look at each one, to find out how they might work.
Some tenants face unemployment as a result of coronavirus, which affects their ability to pay rent.
This leaves landlords with rental arrears and an inability to make mortgage repayments.
The government has helped with a ban on tenant evictions and mortgage payment holidays.
But the situation remains fragile. ARLA Propertymark would like to see the government pay a tenant’s rent in full if they have lost their income due to coronavirus, either through falling ill or after being made redundant.
It would require tenants to send evidence that they’ve been affected to the Department of Work and Pensions, with their rent being paid directly to landlords.
ARLA Propertymark suggests that the evidence could include a sick note being issued by calling 111, a P45, or confirmation from their former employer that they had been laid off.
The ban on tenant evictions was introduced at the start of the first lockdown to protect tenants during the pandemic.
It meant landlords weren’t allowed to start court proceedings and evict a tenant from a property.
With few evictions able to take place until late January, ARLA Propertymark is calling for more support so that the courts can cope with the number of cases.
Landlords could be hit by another tax raid in 2021, after recommendations for a capital gains tax overhaul.
Capital gains tax is levied on the profit when an asset is sold. It’s the gain that’s taxed rather than the total sum received.
The proposal is to align capital gains tax with income tax, which would in general see rates rise. It could mean that the tax rate on capital gains made on buy-to-let properties rises from 18 per cent to 20 per cent for basic rate taxpayers.
For higher rate taxpayers, it would see the rate on residential property that’s not their main home rise from 28 per cent to 40 per cent.
ALRA Propertymark says that any changes to increase capital gains tax will have a ‘considerable negative impact’ on existing and prospective landlords. And it called on the government to avoid introducing any further penalties in 2021 to ‘an already heavily penalised sector’.
Would you like to see the government make these three announcements? Let us know in the comments below.
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