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RLA give cautious welcome to rented homes tax proposals

Responding to proposals from the Conservative Think Tank, ‘Onward’ for Capital Gains Tax relief to encourage longer tenancies and sales to tenants in private rented housing, David Smith, policy director for the Residential Landlords Association (RLA) said: “We welcome Onward’s acceptance of the need for more positive taxation in the rented sector which the RLA has long argued for. Indeed, last year, we suggested using Capital Gains Tax reliefs in a similar way to that being proposed today.

“Since then, a report by academics at Cambridge University for the RLA has argued that it is not clear whether a reduction in the rates at which Capital Gains Tax is applied would incentivise landlords to sell their properties to sitting tenants. A more suitable approach would be a tax relief on rental income for the provision of longer tenancies with a refund on the stamp duty levy for additional properties where a landlord is prepared to sell a property to a sitting tenant.”

Smith continued: “Where Onward is wrong is in its call for landlords to disinvest from the sector. The Chancellor should use his budget to scrap the stamp duty levy on additional properties where landlords are prepared to invest in property adding to the net supply of homes. This could include bringing empty homes back into use, new build properties or converting larger properties into smaller, more affordable units. To tax new housing supply given the current housing crisis we face is simply ludicrous.” 

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