Autumn Budget 2017: a summary for landlords
The Autumn Budget has brought good news as Chancellor Phillip Hammond refrained from introducing any further tax changes for landlords. This makes a change in policy given amendments frequently imposed in previous Budgets, notably including a reduction in the tax relief that they can claim and a 3% stamp duty surcharge.
And what about incentives for landlords offering longer tenancies?
In his speech, Mr Hammond 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 on how we might encourage landlords to offer them to those tenants who want the extra security.”
Letting industry experts are supportive of longer tenancies, especially if they’re combined with attractive tax incentives for landlords. This is a reverse in current policy, where the tax relief claimed by landlords is being reduced and replaced with a 20% tax credit over the four years to 2020.
David Cox, chief executive of ARLA Propertymark – Association of Residential Letting Agents – 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.”
Despite landlords featuring less in the government’s budget than in recent years, there were still several further points of note for them. Here’s 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% on empty homes.
· Long-term tenancies – Following the RLA’s proposal for incentivising long-term lettings, the government has pledged a follow-up consultation.
· 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.
If you would like information about what a letting agent can do for you, or further advice concerning the government’s Budget and what it means for you as a landlord, then please get in touch with your local branch.