National Residential Landlords Association (NRLA)
Capital gains tax hike would freeze rental market
Proposals to increase Capital Gains Tax (CGT) would freeze the rental housing market making it less responsive to tenant demand. That is the warning from the National Residential Landlords Association ahead of the Budget on 3rd March.
With the Office for Tax Simplification proposing measures to equalise CGT with income tax rates, the NRLA is highlighting research which found that 72 per cent of private landlords said that the tax was a major disincentive to sell property on the open market. Increasing it would serve to freeze the market making it far less responsive to changing needs from renters. This includes the shift in demand out of city centres to properties in suburbs, towns and villages, as noted by Rightmove.
With almost half of landlords having entered the market to contribute to their pension, increasing CGT would negatively impact their retirement planning. For many this is predicated on liquidating assets to fund their later life, including in many cases their care costs.
Rather than developing yet more punitive tax hikes on the rental market, the NRLA is calling on the Chancellor to use the tax more smartly in the forthcoming Budget. It recommends that to support the Government’s ambitions for homeownership there should be a CGT exemption or reduction where landlords sell properties to sitting tenants.
This is a policy which has previously been supported by the now Housing, Communities and Local Government Minister, Eddie Hughes MP.
Ben Beadle, Chief Executive of the National Residential Landlords Association, yesterday said:
“Increasing Capital Gains Tax would reduce churn in the rental market undermining the flexibility it has always been good at providing.
“A tax hike would be a kick in the teeth for all those who have invested in property to provide security for the future for themselves and their families.
“The Chancellor needs to end the war on the rental market and recognise the importance of a healthy and vibrant rented housing sector. Tax should be used more smartly, not as a blunt attack on the market.”
- The Office for Tax Simplification report, Capital Gains Tax review – first report: Simplifying by design, is available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/935073/Capital_Gains_Tax_stage_1_report_-_Nov_2020_-_web_copy.pdf.
- Research by the Residential Landlords Association in 2019 found that almost 72% of landlords felt that CGT as it then stood was acting as a major disincentive for them to sell property on the open market. Details can be accessed at: https://www.nrla.org.uk/research/deep-insight/capital-gains-tax
- Rightmove’s Rental Trends Tracker for Q4 2020 can be accessed at: https://www.rightmove.co.uk/news/content/uploads/2021/01/Rental-Trends-Tracker-Q4-2020-FINAL.pdf.
- The Government’s most recent private landlord survey for England can be accessed at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/775002/EPLS_main_report.pdf. It notes that 44% of landlord became one to contribute to their pension.
- Eddie Hughes MP source: https://www.theyworkforyou.com/whall/?id=2018-10-16a.284.1&s=Capital+Gains+Tax+speaker%3A25699#g292.2
Latest News from
National Residential Landlords Association (NRLA)
Khan's call for rent controls would leave London tenants worse off12/04/2021 09:15:00
Rent controls called for by Sadiq Khan would leave tenants across London worse off according to a new analysis published recently (09 April 2021).
NRLA responds to scrapping of Green Homes Grants30/03/2021 11:15:00
Following the government’s decision to end the Green Homes Grant, the NRLA urges the government to adopt a more long-term approach to upgrading properties to meet its zero-carbon target by 2050.
Covid one year on - Ministers failing to tackle rent debt crisis29/03/2021 11:15:00
One year on from the first ban on the repossession of rented homes, new analysis shows that more tenants are likely to lose their homes in the long term as a result.
NRLA calls on local authorities work with private landlords to close the adapted properties gap23/03/2021 12:43:00
NRLA launches guidance to help inform landlords of the role they can play in supporting the UK’s ageing population and disabled renters.
Beginning of the end for emergency measures in the private rented sector11/03/2021 16:15:00
But government remains “unwilling” to tackle rent debt crisis warn landlords.
Chancellors words "ring hollow" for landlords and tenants04/03/2021 16:15:00
Ben Beadle, Chief Executive of the National Residential Landlords Association yesterday responded to the Budget.
Chancellor must act to tackle rent debt crisis19/02/2021 11:15:00
Joint statement by The Big Issue Ride Out Recession Alliance, Crisis, Citizens Advice, Joseph Rowntree Foundation, Money Advice Trust, The Mortgage Works, National Residential Landlords Association, Nationwide Building Society, Propertymark, StepChange Debt Charity and Shelter.
Green Homes Grant Scheme in urgent need of change say landlords18/02/2021 16:15:00
Meera Chindooroy, Deputy Policy Director for the National Residential Landlords Association yesterday responded to concerns raised by the Environmental Audit Select Committee that money not spent on the Government’s Green Homes Grant scheme will not be rolled over to next year.
Government needs to get a grip of Covid rent crisis15/02/2021 10:33:00
Ben Beadle, Chief Executive of the National Residential Landlords Association yesterday responded to the Government’s announcement of an extension to the ban on the enforcement of most residential repossessions in England until 31st March.